Mutual Fund Taxation – Capital Gain Tax Rates for FY 2016-17
Capital Gain Tax in Mutual Fund is calculated by considering following facts :
Resident or Non-Resident (NRI)– Your tax will be based on your residential status. If you are resident then the taxation rules will be different and if NRI then it differs. Hence, first you have to make sure of what is your residential status.
Equity Funds or Non-Equity Funds– Any fund which invests 65% or more in equity is called as Equity Fund. For example Large Cap Funds, Multi-Cap Funds, Small and Mid-cap funds or equity-oriented Balanced Funds.
If the equity portion is less than 65%, then they are all treated as Debt Funds. For example Liquid funds, Ultra-Short Term Funds, Short-Term Funds, Income Funds, Gilt Funds, Debt-oriented balanced funds, Gold funds.
Holding periods of Investment– Holding period for Equity and Debt Funds will be different for taxation purpose.
For Equity Funds, holding period more than a year is called Long Term. If holding period is less than a year then such equity mutual funds holding period is considered as Short Term.
Whereas in case of Debt Funds, holding period more than 3 years is considered as Long Term. If holding period of debt funds is less than 3 years, then it is considered as Short-Term and taxed.
Note : Click here if you want to know more about Cost Inflation Index & Indexed Cost after considering inflation.
You can calculate your Long Term Capital Gain Tax with Indexation through following Calculator :