Tax treatment on redemption of mutual funds

This query is : Resolved

R.J.SHRAVANI

R.J.SHRAVANI (Querist)
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18 March 2014 Dear Sir,
Please let me Know,

The tax treatment on:
a)Redemption of mutual funds.
b)sale of mutual funds.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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18 March 2014 1. If the units were held for a period of more than 12 months, then any gain is exempt.

Any loss is a capital loss which has NO tax treatment.

2. If the units were held for a period of less than 12 months, then the gain is a short term capital gain and is taxable @ 15%.

Any loss can be set off from other gain (Long term or short term). If not set off entirely, then can be carried forward for 8 assessment years.

R.J.SHRAVANI

R.J.SHRAVANI (Querist)
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18 March 2014 Dear Sir

If STT is deducted on the redemption.

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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18 March 2014 1. LTCG will be exempt only if STT has been paid at the time of redemption/sale.

2. Normally units are redeemed with the mutual fund only and they charge STT on the same.

Prof. Bajaj

Prof. Bajaj (Expert)
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25 March 2014 I agree with Mr. Bhardwaj for Equity Mutual Funds.

However, for non-equity mutual funds (i.e. debt, liquid, gold, FOFs etc), units held for more than 365 days will be taxed at 10% (without indexation) or 20%(with indexation.

For units held less than 365 days, the gains will be clubbed with income and taxed as per slab.