TAX IMPLICATION OF MUTUAL FUNDS
Investors often do think of tax implication when making any investment decision. Mutual funds, on the other hand, are one of the most tax friendly investment options available to Indian investors. An important point to note in mutual fund investments is that, an incident of tax arises only upon the sale of units of a mutual fund scheme. Your returns on mutual funds are taxed as dividend and capital gains. Lets have a look at taxation aspect of mutual funds: CONCEPT OF HOLDING PERIOD: The rate of taxation of capital gains provided by mutual funds depends on the holding period and type of mutual fund. The holding period is the duration for which the fund units were held by an investor. The holding period for taxability of mutual funds is as under: Fund Type STCG LTCG Equity funds < 12 months > 12 months Hybrid Equit...