Investors have increased interest in mutual funds, especially its equity schemes. They are making good profits from investing in equity funds. If you too have made a profit in financial year 2024-25 by selling units of mutual funds, then you may have to pay tax on it. It is important to know the tax rules about this. Tax experts say that people investing in mutual funds should know the tax rules on its profit.
No tax on long term capital gains up to Rs 1.25 lakh
mutual funds (Mutual Funds) Long -term capital gains from the equity scheme now levy 12.5 percent tax. However, it is necessary to keep in mind that in a financial year, there is a long-term capital gains tax-free of up to Rs 1.25 lakh from the equity scheme of shares and mutual funds. Long -term capital gains are taxed only when it is more than this limit. This exemption on a capital gains up to Rs 1.25 lakh is only for equity funds. Short term capital gains do not get any discount from tax. Short Term Capital Gains costs 15 % tax.
Change in tax rule on the Gens of Date Mutual Funds
The rules of the capital gains of date mutual funds have changed. This change is applicable to funds purchased after 1 April, 2023. According to the new rule, the capital gains from date mutual funds are taxed like a short term capital gain. It is taxed according to the slab of the taxpayer. This means how long the investment in debt funds has been, it does not matter. However, investment made before April 1, 2023 in date funds is taxed according to the old rule.
Old Tax Taxes on Date Funds Gains
The old rule of investment in debt funds says that if the duration of investment is more than 2 years, then the Gance will be considered as a long term capital gain. It will be taxed at the rate of 12.5 per cent without indexation. The rule of short term capital gains will apply on selling units before 2 years. This means that the taxpayer will be taxed according to the slab of the taxpayer. Many taxpayers investing in mutual funds do not understand the rules of tax properly. They do not consider it necessary to tell about it in income tax returns. This can bring notice of the Income Tax Department.