| Tax on Equity Schemes^ |
Individual/ HUF* |
Domestic Company# |
NRI*$ (Individual) |
| Long Term Capital Gains
(Holding period more than 12 months) |
10%^^ |
10%^^ |
10%^^ |
| Short Term Capital Gains
(Holding period up to 12 months) |
15% |
15% |
15% |
^ Securities Transaction Tax (STT) will be deducted on equity-oriented schemes at the time of redemption / switch to the other schemes / sale of units. Mutual Fund would also pay STT wherever applicable on the securities bought / sold.
^^Income tax at the rate of 10% (without indexation benefit and foreign exchange fluctuation) on long term capital gains exceeding Rs. 1 lakh provided transfer of such units is subject to STT.
* Surcharge to be levied at:
• 37% on base tax where specified income** exceeds Rs. 5 crore;
• 25% where specified income** exceeds Rs. 2 crore but does not exceed Rs. 5 crore;
• 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crore; and
• 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore
In case total income includes income by way of dividend on shares and short-term capital gains on units of equity oriented mutual fund schemes and long-term capital gains on mutual fund schemes, the rate of surcharge on the said type of income not to exceed 15%. In case investor is opting for ‘New Regime’, the rate of surcharge not to exceed 25%.
** Specified income – Total income excluding income by way of dividend on shares and short-term capital gains on units of equity oriented mutual fund schemes and long-term capital gains on mutual fund schemes. Further, Health and Education Cess to be levied at the rate of 4% on aggregate of base tax and surcharge
# Surcharge of 7% on applicable tax rate in case of Domestic Company where the total income exceeds Rs. 1 crore but is less than Rs. 10 crore. Surcharge of 12% if the total income of the Domestic Company exceeds Rs. 10 crore. However, surcharge at flat rate of 10% to be levied on base tax for the companies opting for lower rate of tax of 22%/15%. Further, "Health and Education Cess" to be levied at the rate of 4% on aggregate of base tax and surcharge.
$ Tax to be deducted at source (TDS) at the time of redemption of units in case of NRI investors only.
@ As per Finance Act 2023, capital gains resulting from the transfer of units of a ‘specified mutual fund’ acquired on or after April 1, 2023, will be deemed short-term capital gains irrespective of holding period. The term ‘specified mutual fund’ refers to a mutual fund that invests no more than 35% of its total proceeds in equity shares of domestic companies.
DISCLAIMER: The Income-tax benefits described in this document are as available under the present Income-tax Act, 1961 (the Act) as amended by Finance Act, 2023 and are available subject to relevant conditions. The above statement sets out the provisions of the tax law in summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of units of a mutual fund. The information given is included only for general purpose and is based on the law and practise currently in force in India. The Investors/Unit holders should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment will endure indefinitely. In view of the individual nature of tax consequences, each Investor / Unit holder is advised to consult his / her own professional tax advisor.