I have many long term investments in mutual fund bought through ICICI, Bajaj capital and online purchases. They are all more than a year old, so will there be any capital gains tax if I switch them to direct plan? Aren't there any expenses involved in redemption?
-Suguna
There won't be any tax liabilities if you’ve held the investments for more than 1 year. Long-term capital gains from equity are tax-free in the hands of the investor. On redemption of equity funds, the Securities Transaction Tax will be charged at 0.001 per cent. This amounts to Re 1 on a redemption of Rs 1 lakh. Also, you have to pay the exit load, if applicable, on each fund.
This article was originally published on July 12, 2013.
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