How does taxation work for mutual fund investments?
The content below concerns taxation for retail individual investors only. It is applicable under the current taxation rules and could be subject to changes. Please consult a Chartered Accountant (CA) before filing your returns.
The taxation on mutual funds depends on whether the fund is an equity or non-equity fund. The table below shows the Long-Term Capital Gains (LTCG) and Short-Term Capital Gains (STCG) for both the funds:
| Mutual funds | Holding period | LTCG | STCG |
| Equity-oriented mutual funds | 12 months | 12.50% | 20% |
| Debt-oriented mutual funds acquired before 1st April 2023. Sold between 1st April 2024 and 22nd July 2024 | 36 months | 20% | Slab rate |
| Debt-oriented mutual funds acquired before 1st April 2023 and sold on or after 23rd July 2024 | 24 months | 12.5% | Slab rate |
| Debt-oriented mutual funds acquired post 1st April 2023 and sold on any date | No period of holding | Slab rate | Slab rate |
| Hybrid mutual funds sold between 1st April 2024 and 22nd July 2024 | 36 months | 20% | Slab rate |
| Hybrid mutual funds sold from 23rd July 2024 onwards | 24 months | 12.5% | Slab rate |
To learn more about LTCG and STCG, see What are Long-Term Capital Gains (LTCG) and Short-Term Capital gains (STCG), and how are they calculated?
Did you know? Dividends from non-equity schemes will be given after deducting DDT (Dividend Distribution Tax) which is 28.84%. So, it is best to choose a growth-oriented scheme in this case.
Still need help?
×
![]()