Mutual Fund India Tax

Mutual Fund India Tax Article

How Income From Shares And Mutual Funds Are Taxed In India

The below table describes how capital gains are taxed in india

# Source Of Income Criteria Tax Example 1 Share Trading - Short Term Purchased and sold within one year and STT is paid. 15 % on the profit You did buy a Stock ‘A' on Dec 1 2009 and sold it on Dec 11 2009. You made a profit of Rs.5000. Then you have to pay tax for 15% of Rs.5000 2 Share Trading - Long Term If you are holding a stock for more than one year and STT is paid. No Tax You did buy a Stock ‘A' on Dec 1 2008 and sold it on Dec 11 2009. You made a profit of Rs.5000. As you are holding the stock for more than a year it is not taxable. 3 Mutual Funds (Equity) - Short Term Purchased and sold within one year. 15 % on the profit You did buy a MF ‘A' on Dec 1 2009 and sold it on Dec 11 2009. You made a profit of Rs.5000. Then you have to pay tax for 15% of Rs.5000 4 Mutual Funds (Equity) - Long Term You should hold a MF for more than one year No Tax You did buy a MF ‘A' on Dec 1 2008 and sold it on Dec 11 2009. You made a profit of Rs.5000. As you are holding the MF for more than a year it is not taxable. 5 Dividends from Mutual Funds Any dividend you receive from the MF No Tax MF's might issue dividend. These dividends are not taxable. 6 Dividends from Companies (Share / Equity) Any dividend you receive from the Companies (Share / Equity) No Tax Companies might issue dividends to their share holders. These dividends are not taxable.

1 Year = 365 Calendar Days

STT = Security Transaction Tax. Your share broker might have deducted this tax during the trading transaction.

MF = Mutual Funds

*Updated for FY 2009 - 2010

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