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Paying for Switchover

Do we have to pay tax even for switching to a different fund of the same fund house? Would my switch from Templeton India Income Fund to Franklin India Opportunities within a year be taxable?
- Anshuman Garg

Do we have to pay capital gains tax even for switching the investments to a different fund of the same fund house? I have switched my investments from Templeton India Income Fund to Franklin India Opportunities within a year. Would I be required to pay capital gains tax?
-Anshuman Garg

Capital gains tax is applicable even if you switch your investment to a fund of the same fund house. Since your holding period was less than one year, therefore your gains will be treated as short-term capital gains and put to tax. The short term capital gains from a debt fund are to be clubbed with your other incomes and taxable as per the slab system. If you fall under the 30 per cent tax slab, your gains will be subject to tax at the rate of 30 per cent (plus surcharge and cess, as applicable).


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