http://www.tflguide.com/2011/12/mutual-fund-taxation-in-india.html
“I know that some short term as well as long term tax need to paid on redemption of mutual fund, but I don’t know where to pay and how much to pay.
Can you please take following scenario and help me out to calculate tax?
Suppose my salary income is Rs. 8,50,000 per annum, I am in 20% tax slab. Apart from that only mutual fund income is there.
1. I have purchased Equity mutual fund Rs. 10000 on 20-04-2010 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much long term capital tax I need to pay in this year?
Ans. Here Long Term Capital Gain on Equity is applied – So NIL tax.
2. I have purchased Equity mutual fund Rs. 10000 on 20-04-2011 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much short term capital tax I need to pay in this year?
Ans. Here Short Term Capital Gain on Equity is applied – So 15% tax on gains or Rs 150.
3. I have purchased Debt mutual fund Rs. 10000 on 20-04-2010 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much long term capital tax I need to pay in this year?
Ans. Here Long Term Capital Gain on Debt is applied – So 10% tax or Rs 100 (I am assuming that Indexation is not used).
4. I have purchased Debt mutual fund Rs. 10000 on 20-04-2011 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much short term capital tax I need to pay in this year?
Ans. Here Short Term Capital Gain on Debt is applied – so appreciation of Rs 1000 will be added to your income tax & taxed according to your slab.
5. I have purchased hybrid mutual fund(say HDFC Balanced) Rs. 10000 on 20-04-2010 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much long term capital tax I need to pay in this year?
Ans. As I told you earlier that balanced funds or funds with more than 65% in equities are qualified as Equity Funds – so answer will be same as question 1.
6. I have purchased hybrid mutual fund(say HDFC Balanced) Rs. 10000 on 20-04-2011 and sold it on 20-10-2011 and Redemption money is Rs.11000. How much short term capital tax I need to pay in this year?
Ans. Same as Question 2”
Hope now you have clear idea about capital gains. Let’s see second part of income from mutual fund – that is Dividend Income.
