How money withdrawn from an equity mutual fund through SWP is tax free

The SWP amount withdrawn from equity mutual funds is tax free only if it is withdrawn after one year from the date of initial investment. The amount is tax free because long term capital gains is tax free in case of equity oriented mutual funds.

In case you withdraw any amount through SWP or otherwise before one year (units held for 12 months or less) then short term capital gains tax will be applicable. For resident individuals, the short term capital gain tax is 15% + 15% Surcharge + 3% Cess = 17.7675%