Do you hold mutual funds units in your portfolio? If yes, then it a very sensible decision that you have made .
Not only do mutual funds provide relief from paying taxes on gains but also they have the potential to grow your wealth over time.
Having said this , are you aware of latest taxation rules on selling mutual fund units ?
Below guide is handy while selling those mutual fund units you hold in your portfolio.
Tip: Study below points carefully and sell /hold units by looking at the date of purchase of mutual fund units to make the most of investment in mutual funds.
Capital Gains Taxation
Equity Oriented Schemes
- Long Term Capital Gains are exempt from taxes for FY 16-17 as per Finance Act , 2016.
- Short term Capital Gains taxable @ 15%
Other than Equity Oriented Schemes
- Long Term Capital Gains : 20 % after indexation
- Short Term Capital Gains: 30% (assuming the investor falls into highest tax bracket)
For equity oriented schemes, If units are held for 12 months or more, same are treated as Long Term holdings.
For equity oriented schemes, if units are held for less than 12 months, same are treated as Short Term holdings.
For Non-Equity oriented schemes, if unis are held for more than 36 months , same are treated as Long Term holdings.
For Non-equity oriented schemes, If units are held for less than 36 months , same are treated as Short Term holdings.
Tax Deducted @ Source (applicable only to NRI investors)
Equity oriented schemes:
- Long Term Capital Gains- Nil
- Short term Capital Gains- 15%
Other than equity oriented schemes
- Long term Capital Gains- 10%(for unlisted) and 20%(for listed)
- Short Term Capital Gains-30% (Assuming the investor falls into highest tax bracket)
Tax Implication on Dividend Received by Unit Holders
- Equity Oriented Schemes- Nil
- Debt Oriented schemes -Nil