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Do systematic transfer plans (STPs) attract capital gains tax?

STPs have the same tax treatment as selling one fund and buying another

Will I be liable to pay short-term capital gains tax if I setup a systematic transfer plan (STP) from a debt fund to an equity fund before 3 years from date of investment?
-Anupam Agrawal

Systematic Transfer Plan (STP) allows an investor to transfer a fixed amount regularly from one fund to another at a pre-defined frequency.
In your case, each STP installment from a debt fund, with a holding period of less than three years, will attract short-term capital gains tax. Therefore, the gains will be added to your total income and taxed at the marginal rate of tax (as per the slab system).

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