investment

Mutual Funds Taxation: Complete Guide

Understanding how mutual fund investments are taxed - equity, debt, hybrid funds taxation rules.

GetYourCA Team
12 January 2026·Updated 12 January 20261 min read12.5K views

Mutual Fund Taxation#

Equity Funds#

TypeHolding PeriodTax Rate
LTCG>1 year12.5%
STCG≤1 year20%

Debt Funds#

Taxed as per income slab (no special rate)

ELSS Funds#

  • Qualify under Section 80C
  • 3-year lock-in
  • LTCG 12.5% after lock-in

Dividend Taxation#

  • Dividend received is taxable in hands of investor
  • No dividend distribution tax (DDT) now

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Disclaimer

We have taken utmost care to research and write this article for your information. However, tax laws are complex and subject to frequent changes. This article is for general guidance only and should not be considered professional advice. Individual circumstances vary significantly — what works for one person may not apply to another.

Before making any tax-related decisions, we strongly recommend consulting with a qualified Chartered Accountant or tax professional who can assess your specific situation. We do not accept any liability for decisions made based on this information.

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