No tax has to be paid of equity fund units that have been held for over 1 year, on which STT is levied...
05-Feb-2013 •Research Desk
What are the tax implications on long-term capital gains out of redemptions on equity mutual fund units on which STT has already been paid? - Kanjilal Amit
The law is very simple in this regard. Whenever the Securities Transaction Tax (STT) is levied, investors don't have to pay any capital gains tax for units that have been held for over 1 year. However, short-term capital gains tax has to be paid on units held for less than 1 year, even if the STT has been paid on them.