MUTUAL FUNDS

HOW MUTUAL FUNDS IN INDIA ARE TAXED

Published By Livemint | 28 Jan, 2023

Taxation of mutual funds depends on type of fund and the type of income it generates

Long-term capital gains on units held for more than 12 months are taxed at 10% on equity mutual funds

Short-term capital gains (STCG) on units held for 12 months or less are taxed at 15%

Debt mutual funds schemes hold less than 65% of their total portfolio in equities

LTCG on debt mutual fund units held for more than 36 months or three years are taxed at 20% after indexation

Indexation is a method used to adjust the cost of an asset for inflation

STCG if held for less than 36 months are taxed as per individual's tax slab