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Mutual fund taxation
Text: Centre for Investment Education and Learning (CIEL)
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Type of mutual fund scheme
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Mutual fund: Capital gain tax
Equity funds: Gains from equity funds redeemed within one year are taxed at 15%. If the same is redeemed after one year, the gains over Rs.1 lakh are taxed at 10%.Non-equity funds: If these are redeemed within three years, the gains are added to the income and taxed as per the applicable income tax slab. However, if non-equity funds are redeemed after three years, the gains are taxed at 20% with indexation benefits.
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Dividend income
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Key points to note
b) Securities transaction tax (STT) is also applicable at 0.001% on redemption from equity funds, irrespective of the holding period.
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