Mutual Fund Tax Details
Following rules are applicable, according to time frame:
- If you sell your holdings in an equity mutual fund before a year then a flat rate of 15% STCG (short term capital gain) is applicable.
- In case the investor sells his mutual fund units after a year then LTCG (long term capital gain) tax is applicable. As per LTCG tax, gains of over Rs.1 lakh in a financial year are taxed at 10%.
- In case debt mutual funds are sold before completion of three years of holding, returns are added to the total income and regular income tax as per the applicable tax slab gets applied.
- If debt mutual funds are sold after three years, then returns are treated as long-term capital gains and are taxed at a rate of 20% after indexation, plus cess @3%.