Income Tax Filing: Income From Equity Mutual Funds
Date: 17-03-2017 Views: 1019
Gains made from the sale of equities and equity funds can make a difference to the income you report during income tax filing. Find out the essential details.
Edited transcripts
Udayan Ray: Hi there! Welcome to FundooMoney web series on tax filing. We are discussing various aspects people need to keep in mind while filing for taxes.
Now, a lot of buy equity mutual funds since they don’t have the time or the wherewithal to buy stocks. We are basically talking of mutual funds that invest in stocks. So, what does a person who sold equity mutual funds (last financial year) do now, when he is filing for taxes?
Now, with me is Swami Saran Sharma, eminent tax expert. He will give us some insights as to how this particular income i.e. from selling equity mutual funds, will be treated in the tax return. Swami Saran Sharma: Udayan, actually the treatment of equity mutual funds is the same as making equity investments yourself. Suppose, you directly invest into the market or you invest through a mutual fund, the treatment of gain taxation is the same.
If you hold the equity mutual fund for a year and then sell, the entire amount of gain is exempt from tax. In case you hold for less than a year, you pay a flat tax at the rate of 15% on the gains you made on the sales.
Udayan Ray: So, the message is quite clear. So, if you held the equity mutual fund units for more than a year—no tax. But if you held it for less than a year, there is some tax you need to pay.
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