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  4. I wanted to know about the tax rules that is applicable on various categories of Mutual funds

I wanted to know about the tax rules that is applicable on various categories of Mutual funds

I am new to Mutual Funds. I wanted to know about the tax rules that is applicable on various categories of Mutual funds that includes liquid funds as well as per the rules of Union budget 2016. I shall be grateful to you if you can share your thoughts / provide me with some resources to read?

Mar 29, 2016 by Utpalendu Sarkar,   |   Mutual Fund

Please note the following in response to your query -

1. Equity Oriented Mutual Funds - Long Term Capital Gains (units held for more than 12 months) = NIL

2. Equity Oriented Mutual Funds - Short Term Capital Gains (units held for 12 months or less) = 15%

3. Equity Oriented Mutual Funds - Dividends are Tax Free

4. Schemes other than Equity Oriented Funds, Like Debt Funds or Liquid Funds - Long Term Capital Gains (units held for more than 36 months) = 20% with indexation benefit. No TDS at source for resident individuals. However, for NRIs tax is deducted at source

5. Schemes other than Equity Oriented Funds, Like Debt Funds or Liquid Funds - Short Term Capital Gains (units held for less than 36 months) = 30%. No TDS at source for resident individuals. However, for NRIs tax is deducted at source

6. Schemes other than Equity Oriented Funds, Like Debt Funds or Liquid Funds - Dividends in the hand of the Investor is tax free. However, dividend distribution tax @ 25% is payable by the scheme.

7. Taxation for ELSS category and Equity Oriented Hybrid Funds (popularly known as Balanced Funds) is same as that of Equity Oriented Mutual Funds.

8. Taxation for Debt oriented Balanced Funds (popularly known as MIPs) is same as that of Debt Funds (Schemes other than Equity Oriented Funds)

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