What are the taxes on gains made from Mutual Funds?
Equity Mutual Funds: If held for less than a year, the gains attract a short term capital gains tax of 15% on the gains.
If held for greater than one year, profits are taxed at 10% if profits are greater than 1 Lakh.
Debt Mutual Funds: If held for less than three years, the gains are clubbed with your income and taxed as per your tax slab – much like FDs. If however, you hold these investments for a period of more than 3 years, then the gains are indexed and taxed at 20%. This results in a nominal tax outflow.