Call us : +91 080 41205549

Whatsapp : +91 82969 08111

member login

back
Industry News

How much income tax you have to pay on mutual funds gains?
19-Oct-2020
Read More News

Mutual funds earnings called as capital gains are taxable in the hands of investors. The tax to be paid on the capital gains depends on the category of the mutual fund scheme and the time period for which the investment was held. For an instance gains made on an investment in equity mutual fund sold before completion of 12 months from the date of purchase is termed as short term capital gains. Gains on any investment held over 12 months is long term capital gains. Similarly, in case of debt funds or any other category apart from the equity schemes, earnings on an investment sold before completion of 36 months is termed as short term capital gains and gains by selling an investment after completion of 36 months is termed as long term capital gains.

Here’ are the current rules of taxation of the equity and debt mutual funds:

How much income tax you have to pay on gains in equity-oriented mutual fund schemes

  • Long term capital gains on units held for more than 12 months are taxed at 10%, without indexation benefit. Long term capital gains upto 1 lakh are not taxed.
  • Short term capital gains on units held for 12 months or less are taxed at a flat rate of 15%.

How much income tax you have to pay on gains in debt mutual fund schemes

Debt mutual funds and schemes that hold lesser than 65% of their total portfolio in equities are taxed as per the rules given below:

  • Long term capital gains on units held for more than 36 months or three years are taxed at 20% after providing for indexation.
  • Short term capital gains on units held for 36 months or less are added to the income of the individual and taxed as per the applicable slab rate.

What is indexation?

Indexation is a process by which the purchase price of an asset is adjusted in a way to factor in inflation over the years. Indexation brings up the purchase price, reducing the overall gains on the investment for the purpose of taxation, which in turn results in lower taxes. Indexation reduces the tax outgo.

Source : Live Mint back
×
AMFI REGISTRED MUTUAL FUND DISTRIBUTOR

Contact Us

BOHO FINSERV PVT LTD.

Unit No.3, I floor, "West Gate Point"
#77, R V Road, Basavanagudi,
BANGALORE-560004

PH: +91 080 41205549

Mob No: 8296908111

E-mail: info@bohoindia.com

Keep in Touch

All right reserved © 2019 www.bohoindia.com