Tax on Mutual Funds

Mutual funds are instruments that pool in savings of various investors to invest them in shares, debt securities,money market securities etc.

Mutual funds further invest your money in :

  • Debt Instruments – Debt Mutual Funds.
  • Equity – Equity Mutual Funds.

You have been advised many times to invest your money in mutual funds by various experts.But,are you aware of the mutual fund taxation procedure.

Here we have simplified things for you to answer your queries regarding :

What is Tax on mutual fund ?

What is Short term Capital Gain and Long term Capital Gain in relation to Equity  funds ?

What is Short term Capital Gain and Long term Capital Gain on Non-Equity funds ?

How these Capital Gains on mutual funds are taxed ?

Here is the answer to all the above queries in a simplified manner.

Just,go through the below char,you will get t to know how Capital Gains from mutual funds are taxed in the short term and the long term :

Tax on Mutual Funds

Period of Holding
Tax rate
Equity funds :
STCG - Short term Capital Gain
MF units held for less than 1 year
LTCG - Long term Capital Gain
MF units held for > 1 year
Taxable @ 10% where LTCG>1 lakh (No indexation benefit) : As per amendment in Budget 2018
Non-Equity funds
STCG - Short term Capital Gain
MF units held for less than 3 years
As per Individual tax slab rates
LTCG - Long term Capital Gain
MF units held for > 3 years
20% (with indexation)

Download in pdf format : Tax on mutual funds

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4 thoughts on “Tax on Mutual Funds”

  1. I am retired senior citizen.My pension income is only 13272 yearly.If I make short term gain from stock,mutual fund etc.This short term capital gain is taxable or not .Total income including capital gain is below taxable limit.

  2. Every mutual fund investor requires to know this tax if he actively invest in the market. This will be very beneficial for him.


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