How should I calculate capital gains as well as losses for mutual funds when the investments are over a long as well as a short period of time?
-Ganpathy
Taxation of mutual fund gains is fairly straight forward in the way they are classified. If you’ve invested in equity mutual funds, then the long-term gains are tax-free in your hand while short-term gains are taxed at 15 per cent. In case of fixed income funds, the short-term gains are added to your taxable income while the long-term gains are taxed at 10 per cent flat or 20 per cent after indexation. You are at liberty to choose one of these two options. While taxation of your mutual fund gains might get complicated if you have too many investments, else it’s fairly straight forward to understand.
This article was originally published on May 04, 2012.
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