{"id":25623064,"date":"2025-09-02T11:55:10","date_gmt":"2025-09-02T06:25:10","guid":{"rendered":"https:\/\/entri.app\/blog\/?p=25623064"},"modified":"2026-01-27T14:20:26","modified_gmt":"2026-01-27T08:50:26","slug":"how-much-tax-should-you-pay-for-mutual-funds","status":"publish","type":"post","link":"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/","title":{"rendered":"How Much Tax Should You Pay for Mutual Funds?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d3eb047b7f2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d3eb047b7f2\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Mutual_Funds_and_Indian_Tax_Law_The_Basics\" >Mutual Funds and Indian Tax Law: The Basics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Equity_Mutual_Funds_Taxation_Rules\" >Equity Mutual Funds: Taxation Rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Non-Equity_Mutual_Funds_Taxation_Rules\" >Non-Equity Mutual Funds: Taxation Rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Hybrid_International_Gold_and_Fund_of_Funds\" >Hybrid, International, Gold, and Fund of Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Key_Taxation_Concepts_Explained\" >Key Taxation Concepts Explained<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#How_To_Calculate_Tax_on_Mutual_Fund_Gains\" >How To Calculate Tax on Mutual Fund Gains<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#TDS_Rules_for_NRIs\" >TDS Rules for NRIs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Tax_Filing_and_Compliance_Tips\" >Tax Filing and Compliance Tips<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Expert_Tips_on_Minimizing_Mutual_Fund_Tax\" >Expert Tips on Minimizing Mutual Fund Tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Recent_Changes_Whats_New_for_2025\" >Recent Changes: What\u2019s New for 2025?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Investing in mutual funds has become a preferred choice for Indian investors seeking diversified exposure to equity, debt, or hybrid asset classes. As per the mutual funds report monthly inflow of SIP has crossed 25000 crores per month. That is an insane 3x growth for the last 5 years. However, understanding <strong>taxation on mutual funds<\/strong> is crucial to optimizing net returns and ensuring compliance with Indian tax laws.<\/p>\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">This article offers a thorough explanation of mutual fund taxation with special focus on recent changes, different fund categories, common pitfalls, and tips for smart tax planning in India.<\/p>\n<div class=\"alert alert-info\">\n<p><strong>Key Takeaways:<\/strong><\/p>\n<ul>\n<li>Tax on mutual funds in India is divided into capital gains tax based on the holding period and the type of fund you are investing.<\/li>\n<li>There are short-term and long-term capital gains taxes that vary depending on the type of mutual fund and how long you hold it.<\/li>\n<li>Equity mutual funds are taxed differently from debt mutual funds, with equity funds offering tax benefits like exemption up to \u20b91.25 lakh in long-term capital gains.<\/li>\n<li>Understanding the nuances of STT (Securities Transaction Tax), indexation, and dividend distribution tax (DDT) is crucial for efficient tax planning.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"mutual-funds-and-indian-tax-law-the-basics\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Mutual_Funds_and_Indian_Tax_Law_The_Basics\"><\/span><strong>Mutual Funds and Indian Tax Law: The Basics<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-25623081 aligncenter\" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844.webp\" alt=\"Mutual Funds\" width=\"435\" height=\"240\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844.webp 1000w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844-300x166.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844-768x424.webp 768w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844-150x83.webp 150w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/844-750x414.webp 750w\" sizes=\"auto, (max-width: 435px) 100vw, 435px\" \/><\/p>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Mutual funds<\/strong>\u00a0in India are subject to capital gains tax and, in some cases, dividend tax.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Tax rules differ based on the type of fund:\u00a0<strong>equity, debt, hybrid<\/strong>, or others (gold, international, and fund-of-funds).<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">The\u00a0<strong>holding period<\/strong>, how long the units are held, determines whether the gains are <strong>short-term<\/strong>\u00a0or\u00a0<strong>long-term<\/strong>.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">As of April 1, 2025, the Indian government has revised several definitions and taxation brackets for various fund categories.<\/p>\n<\/li>\n<\/ul>\n<h2 id=\"equity-mutual-funds-taxation-rules\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Equity_Mutual_Funds_Taxation_Rules\"><\/span><strong>Equity Mutual Funds: Taxation Rules<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Definition<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Equity mutual funds<\/strong>\u00a0are schemes that invest at least 65% of their corpus in equity shares of domestic companies.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Tax Treatment<\/strong><\/h3>\n<div class=\"group relative\">\n<div class=\"w-full overflow-x-auto md:max-w-[90vw] border-subtlest ring-subtlest divide-subtlest bg-transparent\">\n<table class=\"border-subtler my-[1em] w-full table-auto border-separate border-spacing-0 border-l border-t\">\n<thead class=\"bg-offset\">\n<tr>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Period Held<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Type of Gain<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Tax Rate<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Exemption\/Threshold<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Notes<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12 months or less<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Short-Term Capital Gain (STCG)<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">15%<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">None<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Surcharge and cess extra<\/td>\n<\/tr>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">More than 12 months<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Long-Term Capital Gain (LTCG)<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12.5% on gains above \u20b91.25 lakh<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">First \u20b91.25 lakh tax-free<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Indexation benefit unavailable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Example<\/strong><\/h3>\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">If total LTCG in a financial year equals \u20b91.45 lakh, only \u20b920,000 is taxable at 12.5%; \u20b91.25 lakh remains exempt.<\/p>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Dividend Tax<\/strong><\/h3>\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">All mutual fund dividends are taxed in the hands of investors as per the applicable income tax slab.<\/p>\n<p style=\"text-align: center;\"><strong><a class=\"in-cell-link\" href=\"https:\/\/entri.app\/course\/stock-market-course\/\" target=\"_blank\" rel=\"noopener\">Start investing like a pro. Enroll in our Stock Market course!<\/a><\/strong><\/p>\n<h2 id=\"debt-mutual-funds-taxation-rules\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Non-Equity_Mutual_Funds_Taxation_Rules\"><\/span><strong>Non-Equity Mutual Funds: Taxation Rules<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Definition<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Debt mutual funds<\/strong> are those where more than 65% of the portfolio is invested in debt instruments, such as government securities or corporate bonds.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Latest Update (Effective April 1, 2025)<\/strong><\/h3>\n<div class=\"group relative\">\n<div class=\"w-full overflow-x-auto md:max-w-[90vw] border-subtlest ring-subtlest divide-subtlest bg-transparent\">\n<table class=\"border-subtler my-[1em] w-full table-auto border-separate border-spacing-0 border-l border-t\">\n<thead class=\"bg-offset\">\n<tr>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Period Held<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Type of Gain<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Tax Rate<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Notes<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Up to 2 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Short-Term Capital Gain (STCG)<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">As per the investor\u2019s income tax slab<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">No indexation benefit<\/td>\n<\/tr>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">More than 2 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Long-Term Capital Gain (LTCG)<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12.5%<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">No indexation benefit; earlier LTCG was taxed at 20% with indexation pre-2023<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Older Investments<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">If the investment is made <strong>before April 1, 2023<\/strong>, LTCG is taxed at 20% with indexation if held for over 3 years.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Investments between April 1, 2023, and March 31, 2025, are taxed as per slab rate, regardless of holding period.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Dividend Tax<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Dividends are taxed as per the individual&#8217;s income tax slab.<\/p>\n<\/li>\n<\/ul>\n<table width=\"468\">\n<tbody>\n<tr>\n<td colspan=\"2\"><strong>Gain Financial Literacy in your Mother Tongue<\/strong><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/course\/stock-market-course-in-malayalam\/\">Stock Market Course in Malayalam<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/course\/mutual-funds-course-in-kerala\/\">Mutual Funds Course in Malayalam<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/course\/stock-market-course-in-tamil\/\">Stock Market Course in Tamil<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/course\/mutual-funds-course-in-tamil\/\">Mutual Funds Course in Tamil<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/course\/stock-market-course\/\">Stock Market Course<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/course\/mutual-funds-course\/\">Mutual Funds Course<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"hybrid-international-gold-and-fund-of-funds\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Hybrid_International_Gold_and_Fund_of_Funds\"><\/span><strong>Hybrid, International, Gold, and Fund of Funds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"group relative\">\n<div class=\"w-full overflow-x-auto md:max-w-[90vw] border-subtlest ring-subtlest divide-subtlest bg-transparent\">\n<table class=\"border-subtler my-[1em] w-full table-auto border-separate border-spacing-0 border-l border-t\">\n<thead class=\"bg-offset\">\n<tr>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Fund Type<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">STCG (Holding Period)<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">STCG Tax Rate<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">LTCG (Holding Period)<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">LTCG Tax Rate<\/th>\n<th class=\"border-subtler p-sm break-normal border-b border-r text-left align-top\">Threshold\/Notes<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Equity-Oriented Hybrid<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">\u226412 months<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">15%<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">&gt;12 months<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12.5% (\u20b91.25L exempt)<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">\u226565% in equity<\/td>\n<\/tr>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Debt-Oriented Hybrid<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">\u22642 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">As per the slab<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">&gt;2 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12.5%<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">&lt;65% in equity<\/td>\n<\/tr>\n<tr>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">Gold, International, FoF<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">\u22642 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">As per the slab<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">&gt;2 years<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">12.5%<\/td>\n<td class=\"px-sm border-subtler min-w-[48px] break-normal border-b border-r\">No indexation benefit post-2025<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">International and gold funds, as well as fund-of-funds, follow the new debt fund taxation structure from April 1, 2025.<\/p>\n<\/li>\n<\/ul>\n<div class=\"lead-gen-block\"><a href=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/08\/mutual-fund_updated.pdf\" data-url=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/08\/mutual-fund_updated.pdf\" class=\"lead-pdf-download\" data-id=\"25556854\">\n<p style=\"text-align: center;\"><button class=\"btn btn-default\">free download mUTUAL FUND course syllabus<\/button><\/p>\n<\/a><\/div>\n<h2 id=\"key-taxation-concepts-explained\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Key_Taxation_Concepts_Explained\"><\/span><strong>Key Taxation Concepts Explained<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>What Are Capital Gains?<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Capital Gains<\/strong>\u00a0are profits realized from selling mutual fund units. Tax treatment depends on type and holding period.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Short-Term vs. Long-Term: How Is &#8220;Period Held&#8221; Calculated?<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Equity funds:<\/strong>\u00a0Less than or equal to 12 months: STCG; More than 12 months: LTCG.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Debt funds, international, gold, FoFs:<\/strong>\u00a0Less than or equal to 2 years: STCG; More than two years: LTCG.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Indexation<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Indexation<\/strong>\u00a0allows investors to adjust the purchase price by inflation, reducing taxable gains.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Indexation benefit is NO LONGER AVAILABLE for new investments in debt funds, international, gold, and FoFs post April 1, 2025.<\/p>\n<\/li>\n<\/ul>\n<h2 id=\"how-to-calculate-tax-on-mutual-fund-gains\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"How_To_Calculate_Tax_on_Mutual_Fund_Gains\"><\/span><strong>How To Calculate Tax on Mutual Fund Gains<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-25623082 aligncenter\" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982.webp\" alt=\"Key Taxation Concepts\" width=\"484\" height=\"255\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982.webp 1000w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982-300x158.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982-768x404.webp 768w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982-150x79.webp 150w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/2151953982-750x395.webp 750w\" sizes=\"auto, (max-width: 484px) 100vw, 484px\" \/><\/p>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>For Equity Mutual Funds:<\/strong><\/h3>\n<ol class=\"marker:text-quiet list-decimal\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Calculate net gain = Redemption value &#8211; (Purchase value + charges)<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Identify holding period.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Apply STCG or LTCG rule:<\/p>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">STCG: Tax at 15%<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">LTCG: Up to \u20b91.25 lakh tax-free; 12.5% on excess.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Debt Mutual Funds:<\/strong><\/h3>\n<ol class=\"marker:text-quiet list-decimal\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Determine holding period.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">If \u22642 years: Add gain to total income, taxed by slab.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">If &gt;2 years (for investments post-April 1, 2025): 12.5% tax, no indexation benefit.<\/p>\n<\/li>\n<\/ol>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>SIPs (Systematic Investment Plans):<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Each SIP installment is treated as a separate investment for determining the holding period and tax applicability.<\/p>\n<\/li>\n<\/ul>\n<h3 id=\"dividend-taxation\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><strong>Dividend Taxation<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Post-April 2020, dividends are added to investors\u2019 income and taxed as per their income tax slab (no Dividend Distribution Tax at the fund level).<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">TDS (Tax Deducted at Source) at 10% applies if the dividend payout exceeds \u20b95,000 in a financial year for resident individuals.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"5917\" data-end=\"5959\"><strong data-start=\"5920\" data-end=\"5959\">Securities Transaction Tax (STT)<\/strong><\/h3>\n<p data-start=\"5961\" data-end=\"6044\">STT is applicable to <strong data-start=\"5982\" data-end=\"6021\">transactions of equity mutual funds<\/strong> on the stock exchange.<\/p>\n<ul data-start=\"6046\" data-end=\"6146\">\n<li data-start=\"6046\" data-end=\"6146\">\n<p data-start=\"6048\" data-end=\"6146\"><strong data-start=\"6048\" data-end=\"6060\">Tax Rate<\/strong>: <strong data-start=\"6062\" data-end=\"6070\">0.1%<\/strong> on both <strong data-start=\"6079\" data-end=\"6089\">buying<\/strong> and <strong data-start=\"6094\" data-end=\"6105\">selling<\/strong> equity mutual funds through an exchange.<\/p>\n<\/li>\n<\/ul>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"_tableWrapper_1rjym_13 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"6148\" data-end=\"6497\">\n<thead data-start=\"6148\" data-end=\"6234\">\n<tr data-start=\"6148\" data-end=\"6234\">\n<th data-start=\"6148\" data-end=\"6179\" data-col-size=\"sm\"><strong data-start=\"6150\" data-end=\"6166\">Type of Fund<\/strong><\/th>\n<th data-start=\"6179\" data-end=\"6207\" data-col-size=\"sm\"><strong data-start=\"6181\" data-end=\"6204\">Tax on Transactions<\/strong><\/th>\n<th data-start=\"6207\" data-end=\"6234\" data-col-size=\"sm\"><strong data-start=\"6209\" data-end=\"6221\">STT Rate<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"6322\" data-end=\"6497\">\n<tr data-start=\"6322\" data-end=\"6409\">\n<td data-start=\"6322\" data-end=\"6354\" data-col-size=\"sm\"><strong data-start=\"6324\" data-end=\"6347\">Equity Mutual Funds<\/strong><\/td>\n<td data-start=\"6354\" data-end=\"6382\" data-col-size=\"sm\">On buying\/selling units<\/td>\n<td data-start=\"6382\" data-end=\"6409\" data-col-size=\"sm\"><strong data-start=\"6384\" data-end=\"6392\">0.1%<\/strong><\/td>\n<\/tr>\n<tr data-start=\"6410\" data-end=\"6497\">\n<td data-start=\"6410\" data-end=\"6442\" data-col-size=\"sm\"><strong data-start=\"6412\" data-end=\"6433\">Debt Mutual Funds<\/strong><\/td>\n<td data-start=\"6442\" data-end=\"6470\" data-col-size=\"sm\">Not applicable<\/td>\n<td data-start=\"6470\" data-end=\"6497\" data-col-size=\"sm\">N\/A<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h2 id=\"tds-rules-for-nris\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"TDS_Rules_for_NRIs\"><\/span><strong>TDS Rules for NRIs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">For NRIs, TDS is deducted at 20% for equity-oriented and 30% for non-equity schemes, including cess and surcharge, on capital gains and dividend payouts.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">A rebate or refund can be claimed at the time of filing returns if the actual tax liability is lower.<\/p>\n<\/li>\n<\/ul>\n<h2 id=\"tax-filing-and-compliance-tips\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Tax_Filing_and_Compliance_Tips\"><\/span><strong>Tax Filing and Compliance Tips<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>How to Report Mutual Fund Gains in ITR<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">All capital gains, short or long term, must be disclosed in the appropriate schedules of your ITR (ITR-2\/3 for individuals with capital gains).<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Fund houses usually provide <strong>capital gain statements<\/strong>\u00a0that help in reporting the correct figures.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">One must also report dividend income separately under the head \u2018Income from Other Sources\u2019.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0\"><strong>Important Considerations<\/strong><\/h3>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">For investments held jointly, tax liability belongs to the\u00a0<strong>first holder<\/strong>\u00a0as per PAN details.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Losses from mutual funds, short-term or long-term, can be set off against gains of the same nature and carried forward up to 8 years.<\/p>\n<\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<th colspan=\"2\">Related Articles<\/th>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/blog\/understanding-short-term-capital-gain-tax\/\" target=\"_blank\" rel=\"noopener noreferrer\">Understanding Short Term Capital Gain Tax<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/blog\/long-term-capital-gain-tax-on-shares\/\" target=\"_blank\" rel=\"noopener noreferrer\">Long Term Capital Gain Tax on Shares<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/blog\/can-investing-in-stocks-help-you-save-taxes\/\" target=\"_blank\" rel=\"noopener noreferrer\">Can Investing in Stocks Help You Save Taxes in India? (Complete Guide)<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/blog\/insurance-tax-saving-india-guide\/\" target=\"_blank\" rel=\"noopener noreferrer\">Can Investing in Insurance Help You Save Taxes in India?<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/blog\/mutual-fund-tax-saving\/\" target=\"_blank\" rel=\"noopener noreferrer\">Can Investing in Mutual Fund Help You Save Taxes in India? (Complete Guide)<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/blog\/how-to-file-income-tax-return-on-your-own\/\" target=\"_blank\" rel=\"noopener noreferrer\">How to File Income Tax Return (ITR) on Your Own<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/blog\/gst-on-share-trading\/\" target=\"_blank\" rel=\"noopener noreferrer\">GST on Share Trading<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/blog\/what-to-do-if-i-get-income-tax-notice\/\" target=\"_blank\" rel=\"noopener noreferrer\">What to do if I get income tax notice?<\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/entri.app\/blog\/reasons-for-income-tax-notice\/\" target=\"_blank\" rel=\"noopener noreferrer\">Reasons for income tax notice<\/a><\/td>\n<td><a href=\"https:\/\/entri.app\/blog\/how-to-avoid-income-tax-notice\/\" target=\"_blank\" rel=\"noopener noreferrer\">How to avoid income tax notice<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"expert-tips-on-minimizing-mutual-fund-tax\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Expert_Tips_on_Minimizing_Mutual_Fund_Tax\"><\/span><strong>Expert Tips on Minimizing Mutual Fund Tax<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-25623087 aligncenter\" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/Expert-Tips-on-Minimizing-Mutual-Fund-Tax-visual-selection.webp\" alt=\"Expert Tips on Minimizing Mutual Fund Tax\" width=\"457\" height=\"314\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/Expert-Tips-on-Minimizing-Mutual-Fund-Tax-visual-selection.webp 654w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/Expert-Tips-on-Minimizing-Mutual-Fund-Tax-visual-selection-300x206.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/09\/Expert-Tips-on-Minimizing-Mutual-Fund-Tax-visual-selection-150x103.webp 150w\" sizes=\"auto, (max-width: 457px) 100vw, 457px\" \/><\/p>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Leverage LTCG Threshold:<\/strong>\u00a0Optimize redemptions to keep annual long-term capital gains under \u20b91.25 lakh for equity funds.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Utilize Loss Harvesting:<\/strong>\u00a0Book losses where suitable to offset gains in the same financial year.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Invest Systematically:<\/strong>\u00a0SIPs provide flexibility to manage holding periods, optimizing between STCG and LTCG.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\"><strong>Tax Harvesting:<\/strong> Time redemptions and new investments to maximize tax exemption limits and minimize slab-based liability.<\/p>\n<\/li>\n<li><strong>Invest for the Long Term:<\/strong> Holding equity mutual fund units for more than 1 year allows you to benefit from LTCG tax at 10% (above \u20b91 lakh), which is more favorable than STCG tax at 15%.<\/li>\n<li><strong>Invest in Tax-Saving ELSS Funds:<\/strong> Equity Linked Savings Schemes (ELSS) are eligible for deductions under Section 80C of the Income Tax Act, offering a tax-saving option up to \u20b91.5 lakh annually.<\/li>\n<\/ul>\n<h2 id=\"recent-changes-whats-new-for-2025\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Recent_Changes_Whats_New_for_2025\"><\/span><strong>Recent Changes: What\u2019s New for 2025?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul class=\"marker:text-quiet list-disc\">\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">LTCG exemption for equity mutual funds raised to\u00a0<strong>\u20b91.25 lakh per year<\/strong>\u00a0(previously \u20b91 lakh).<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">LTCG on debt mutual funds (and similar) is <strong>standardized to 12.5% without indexation<\/strong>\u00a0for new investments after April 1, 2025.<\/p>\n<\/li>\n<li class=\"py-0 my-0 prose-p:pt-0 prose-p:mb-2 prose-p:my-0 [&amp;&gt;p]:pt-0 [&amp;&gt;p]:mb-2 [&amp;&gt;p]:my-0\">\n<p class=\"my-2 [&amp;+p]:mt-4 [&amp;_strong:has(+br)]:inline-block [&amp;_strong:has(+br)]:pb-2\">Revisions in the definition of what qualifies as debt and hybrid funds (as per new mandates).<\/p>\n<\/li>\n<\/ul>\n<div class=\"lead-gen-block\"><a href=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/08\/mutual-fund_updated.pdf\" data-url=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2025\/08\/mutual-fund_updated.pdf\" class=\"lead-pdf-download\" data-id=\"25556854\">\n<p style=\"text-align: center;\"><button class=\"btn btn-default\">free download mUTUAL FUND course syllabus<\/button><\/p>\n<\/a><\/div>\n<h2 id=\"conclusion\" class=\"mb-2 mt-4 font-display font-semimedium text-base first:mt-0 md:text-lg [hr+&amp;]:mt-4\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"8367\" data-end=\"8692\">By mastering mutual fund taxation, you can cultivate your fortune properly for the long term, a must as an investor. Whether you\u2019re putting money in equity or debt mutual funds, knowing about short and long-term capital gains taxes and dividend rules can help you make more informed choices.<\/p>\n<p data-start=\"8367\" data-end=\"8692\">If you implement sound tax strategies such as holding for long-term, ELSS tax-saving funds, and SIPs, you can eliminate the tax bite and accelerate your wealth-building.<\/p>\n<p data-start=\"8367\" data-end=\"8692\">Keep track of tax law changes, like tax rates and exemptions can change over, time and it\u2019s worth consulting a tax professional for tailored advice.<\/p>\n<div class=\"alert alert-warning\"><strong>Disclaimer:<\/strong>\u00a0The information provided in this article is for general informational purposes only and is not intended as investment advice, financial guidance, or an offer or solicitation to buy or sell any securities. Readers should conduct their own research or consult a qualified financial advisor before making any investment decisions. The author(s) and the publisher disclaim any liability for any loss or damage arising directly or indirectly from the use of or reliance on the information provided herein.<\/div>\n<div><div class=\"modal\" id=\"modal25556854\"><div class=\"modal-content\"><span class=\"close-button\">&times;<\/span>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f25556854-o1\" lang=\"en-US\" dir=\"ltr\" data-wpcf7-id=\"25556854\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/blog\/wp-json\/wp\/v2\/posts\/25623064#wpcf7-f25556854-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"25556854\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.4\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_US\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f25556854-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/><input type=\"hidden\" name=\"_wpcf7cf_hidden_group_fields\" value=\"[]\" \/><input type=\"hidden\" name=\"_wpcf7cf_hidden_groups\" value=\"[]\" \/><input type=\"hidden\" name=\"_wpcf7cf_visible_groups\" value=\"[]\" \/><input type=\"hidden\" name=\"_wpcf7cf_repeaters\" value=\"[]\" \/><input type=\"hidden\" name=\"_wpcf7cf_steps\" value=\"{}\" \/><input type=\"hidden\" name=\"_wpcf7cf_options\" value=\"{&quot;form_id&quot;:25556854,&quot;conditions&quot;:[{&quot;then_field&quot;:&quot;group-coding&quot;,&quot;and_rules&quot;:[{&quot;if_field&quot;:&quot;course&quot;,&quot;operator&quot;:&quot;equals&quot;,&quot;if_value&quot;:&quot;Coding&quot;}]},{&quot;then_field&quot;:&quot;group-accounting&quot;,&quot;and_rules&quot;:[{&quot;if_field&quot;:&quot;course&quot;,&quot;operator&quot;:&quot;equals&quot;,&quot;if_value&quot;:&quot;Commerce&quot;}]}],&quot;settings&quot;:{&quot;animation&quot;:&quot;yes&quot;,&quot;animation_intime&quot;:200,&quot;animation_outtime&quot;:200,&quot;conditions_ui&quot;:&quot;normal&quot;,&quot;notice_dismissed&quot;:false,&quot;notice_dismissed_update-cf7-5.9.8&quot;:true,&quot;notice_dismissed_update-cf7-6.1.1&quot;:true}}\" \/>\n<\/fieldset>\n<p><span class=\"wpcf7-form-control-wrap\" data-name=\"full_name\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Name\" value=\"\" type=\"text\" name=\"full_name\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Phone\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email_id\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-text wpcf7-validates-as-email\" aria-invalid=\"false\" placeholder=\"Email\" value=\"\" type=\"email\" name=\"email_id\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"language\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required\" aria-required=\"true\" aria-invalid=\"false\" name=\"language\"><option value=\"\">Language<\/option><option value=\"Malayalam\">Malayalam<\/option><option value=\"Tamil\">Tamil<\/option><option value=\"Telugu\">Telugu<\/option><option value=\"Kannada\">Kannada<\/option><option value=\"Hindi\">Hindi<\/option><\/select><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"course\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required course-field-select\" aria-required=\"true\" aria-invalid=\"false\" name=\"course\"><option value=\"\">Upskill in<\/option><option value=\"Stock Market Course\">Stock Market Course<\/option><option value=\"Mutual Funds\">Mutual Funds<\/option><option value=\"Forex Trading\">Forex Trading<\/option><option value=\"Coding\">Coding<\/option><option value=\"Commerce\">Commerce<\/option><option value=\"Spoken English\">Spoken English<\/option><option value=\"German Language\">German Language<\/option><option value=\"Montessori Teacher Training\">Montessori Teacher Training<\/option><option value=\"IELTS\">IELTS<\/option><option value=\"OET\">OET<\/option><option value=\"MEP\">MEP<\/option><option value=\"Robotics &amp; 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margin-bottom: -15px;\"> <div id=\"cf-turnstile-cf7-3149329248\" class=\"cf-turnstile\" data-sitekey=\"0x4AAAAAABVigxtkiZeGTu5L\" data-theme=\"light\" data-language=\"auto\" data-size=\"normal\" data-retry=\"auto\" data-retry-interval=\"1000\" data-action=\"contact-form-7\" data-appearance=\"always\"><\/div> <script>document.addEventListener(\"DOMContentLoaded\", function() { setTimeout(function(){ var e=document.getElementById(\"cf-turnstile-cf7-3149329248\"); e&&!e.innerHTML.trim()&&(turnstile.remove(\"#cf-turnstile-cf7-3149329248\"), turnstile.render(\"#cf-turnstile-cf7-3149329248\", {sitekey:\"0x4AAAAAABVigxtkiZeGTu5L\"})); }, 0); });<\/script> <br class=\"cf-turnstile-br cf-turnstile-br-cf7-3149329248\"> <style>#cf-turnstile-cf7-3149329248 { margin-left: -15px; }<\/style> <script>document.addEventListener(\"DOMContentLoaded\",function(){document.querySelectorAll('.wpcf7-form').forEach(function(e){e.addEventListener('submit',function(){if(document.getElementById('cf-turnstile-cf7-3149329248')){setTimeout(function(){turnstile.reset('#cf-turnstile-cf7-3149329248');},1000)}})})});<\/script> <\/div><br\/><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Submit\" \/>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\n<\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Investing in mutual funds has become a preferred choice for Indian investors seeking diversified exposure to equity, debt, or hybrid asset classes. As per the mutual funds report monthly inflow of SIP has crossed 25000 crores per month. That is an insane 3x growth for the last 5 years. However, understanding taxation on mutual funds [&hellip;]<\/p>\n","protected":false},"author":69,"featured_media":25623089,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[802,1867],"tags":[2277],"class_list":["post-25623064","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-stock-marketing","tag-tax-on-mutual-funds"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Much Tax Should You Pay for Mutual Funds? - Entri Blog<\/title>\n<meta name=\"description\" content=\"Learn everything about the tax implications of mutual funds in India, including short-term and long-term capital gains, dividend taxation.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/entri.app\/blog\/how-much-tax-should-you-pay-for-mutual-funds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Much Tax Should You Pay for Mutual Funds? 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