Topic: What are the tax implications on mutual funds?

Does investing in mutual funds save taxes?

This message was edited 1 time. Last update was at 30/06/2009 09:50:34

Different tax implications for equity oriented (min 65% investment in equity) and debt oriented funds
In equity oriented funds, if you sell after one year – you will not need to pay any tax as long term capital gain tax is zero. If you sell within one year – you will need to pay short term capital gain tax which is 10% plus education cess and surplus.
However in debt oriented funds, long term capital gains is the lesser of 20% of gain after indexation 10% of gain before indexation and short term capital gains is subject to tax bracket applicable to the investor.
Dividend is tax free in the hands of the investor
A certain set of equity oriented funds with a lock-in period of 3 years are classified as ELSS and are eligible for section 80 c benefit
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