Mutual fund gains have specific tax treatment based on fund type and holding period. Equity MFs (over 65% equity): held over 12 months = LTCG @ 12.5% (₹1.25L exemption); held under 12 months = STCG @ 20%. Debt MFs: held over 24 months = LTCG @ slab rate (post-2023 reforms removed indexation); under 24 months = STCG @ slab rate. Hybrid funds depend on equity allocation.
When to use this
Use when redeeming: equity MFs (ELSS, large-cap, mid-cap, sector funds), debt MFs (liquid, ultra-short, gilt funds), hybrid MFs (balanced, dynamic asset allocation), international funds (taxed as debt MFs since 2023). The calculator picks the right rate based on fund type + holding period.
Frequently Asked Questions
How are SIP redemptions taxed?
FIFO (First In First Out) - the oldest units sold first. Each SIP installment has its own purchase date for holding-period calculation. So a 5-year SIP redeemed today: the oldest installments (5+ years old) qualify for LTCG, the newest (less than 1 year old) for STCG. The calculator handles this in batch mode.
What happened to debt MF indexation after 2023?
From April 1, 2023, indexation benefit was removed for debt MFs purchased after that date. All debt-MF gains are now taxed at slab rate regardless of holding period. Funds purchased before April 1, 2023 retain the old indexation treatment when sold.
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