Please clarify whether any tax liability arises when selling units in Franklin India Bluechip, HDFC Equity or DSPBR Small & Mid Cap as short-term assets.
—VSN Murthy
If a fund is purchased and kept for over one year, then it is referred to as a long-term investment, and gains or losses made on it are referred to as long-term capital gains or losses, respectively. On the other hand, if an investment has been held for less than a year, then it is referred to as a short-term investment. The gains or losses made on such an investment are also referred to as short-term capital gains or losses, respectively.
All the funds that you have listed are equity funds and as per the income tax laws, you will have to disclose the short-term capital gains that you have made at the time of filing your tax returns. Equity mutual funds attract a 15 per cent short-term capital gains tax rate excluding surcharge and cess.
This article was originally published on February 09, 2012.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
