Capital Gains treatment in units of Mutual Fund

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NIRAJ SANGHAVI (Querist)
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12 June 2008 What is the capital gains treatment in the case of units of mutual fund invested on a daily dividend plan? Meaning the amount accumulated as dividend in the forms of units on the basis of NAV, reinvested and subsequently withdrawns during the year by way of redumption of units.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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12 June 2008 Since the units are redeemed during the same year, the gain is short term capital gain.

In case of Equity oriented MF, where STT is paid, concessional tax of 15% will be charged. In other case normal tax will have to be paid.