Become a Certified GST Practitioner this February. Register Now!

Short Term Capital Gain on Mutual Funds

karan (Student) (30 Points)

06 October 2008

Whether Short Term Capital Gain on Mutual Funds is Taxable or Not ? ? ? ?

PlZZZZZZZZzz SuGgEsT.........

Reply
Follow
Share

3 Replies

Rakesh (Article clerk) (20 Points)
Replied 06 October 2008

Originally posted by :karan
"	Whether Short Term Capital Gain on Mutual Funds is Taxable or Not ? ? ? ? PlZZZZZZZZzz SuGgEsT.........	"

short term capital gain is taxable in the hands of the NRI's only. In case of resident indians it is not taxable unless it is exempt u/s 10 (23D) of the Income Tax Act, 1961.

Upgrade to CAclubindia Pro. Subscribe Now!

Rakesh (Article clerk) (20 Points)
Replied 06 October 2008

Originally posted by :karan
"	Whether Short Term Capital Gain on Mutual Funds is Taxable or Not ? ? ? ? PlZZZZZZZZzz SuGgEsT.........	"

short term capital gain is taxable in the hands of the NRI's only. In case of resident indians it is taxable unless it is exempt u/s 10 (23D) of the Income Tax Act, 1961.

Nalam Ravindranath (78 Points)
Replied 06 October 2008

Mutual funds are types. 1. Equity oriented funds 2) Others.(popularly called as debt funds)

If it is an equity oriented funds it is akin to equity shares, if it held for more than 12 months and sold through a stock excahnge and suffered Securities transaction tax, then the long term gain on such transfer is exempt totally. If the mutual fund is held for less than 12 months and transferred in a similar fashion through stock exchange and suffered STT then the short term capital gain is taxed at 15%( 10 @ upto transfers made before 31-3-08)

If it is second category mutual fund and held for more than 12 months it is a long term asset taxed at 20% with indexation and at 10% without indexation, and if it held for less than 12 months it suffers regular tax .

You better read the offer document of each fund thouhg it is in small print, to undersand the taxation of such funds