I have invested in various types of mutual funds.Please tell me will any taxes be deducted when I redeem my investments? Also, will the money be credited to my bank account?
- Lyndon D Silva
Mutual funds attract short-term and long-term capital gains tax based on the type of fund and the investment horizon. If equity mutual funds are sold before 12 months, they attract short-term capital gains tax of 15 per cent. If equity mutual fund investments are sold after a year, they qualify for long-term capital gains tax of zero. Investments in debt funds held over three years qualify for long-term capital gains tax of 20 per cent with indexation benefit. If investments in debt funds are sold before three years, the short term gains are taxed at the Income Tax rate applicable to the investor. If you have given a mandate to the mutual fund, the money will be credited to your bank account.
This article was originally published on December 29, 2015.
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