Mutual Fund Tax Calculator India — Discovery Notes

Tax Rules — FY 2025-26 (Finance Act 2024)

Equity-Oriented MF (>=65% domestic equity)

• STCG (holding <12 months): 20% under Section 111A
  • Changed from 15% by Finance (No. 2) Act, 2024 (effective 23 July 2024)
• LTCG (holding >=12 months): 12.5% under Section 112A
  • Changed from 10% by Finance (No. 2) Act, 2024
  • Annual exemption: ₹1,25,000 (raised from ₹1,00,000)
  • Exemption shared across all equity shares + equity-oriented MF LTCG in a FY
• STT: 0.001% on redemption value
• Surcharge: Capped at 15% for Sec 111A/112A gains regardless of income level
• Cess: 4% Health & Education Cess on (tax + surcharge)

ELSS (Tax Saver)

• Same taxation as equity MF
• 3-year lock-in per unit (each SIP instalment locked independently)
• Section 80C deduction up to ₹1,50,000/year (old regime only)
• After lock-in: LTCG at 12.5% above ₹1.25L

Debt MF / Liquid / Money Market / Overnight (<65% equity)

• Finance Act 2023 (effective 1 April 2023): Removed LTCG benefit entirely
• ALL gains taxed at income tax slab rate regardless of holding period
• No indexation benefit for post-1 April 2023 purchases
• Pre-April 2023 purchases: Gains on sale after 23 July 2024 taxed at 12.5% without indexation (not slab rate)

Hybrid / Balanced MF (35-65% equity)

• STCG (holding <24 months): Slab rate
• LTCG (holding >=24 months): 12.5% under Section 112
• No indexation (removed by Finance Act 2024)
• ₹1.25L exemption applies only under Sec 112A (equity-oriented), NOT Sec 112

Gold MF / Gold ETF

• STCG (holding <24 months): Slab rate
• LTCG (holding >=24 months): 12.5% under Section 112
• Holding period reduced from 36 to 24 months by Budget 2024
• Indexation removed by Finance Act 2024
• ₹1.25L Sec 112A exemption does NOT apply (that’s only for equity)

International / Foreign MF

• Treated same as debt funds since Finance Act 2023
• ALL gains at slab rate regardless of holding period
• Includes US equity funds, Nasdaq funds, China funds, etc.

Dividend (IDCW)

• Taxed at slab rate as “income from other sources”
• No DDT since FY 2020-21 (abolished by Finance Act 2020)
• TDS at 10% if dividend >₹5,000/year per fund house

Grandfathering — 31 January 2018

• Still active for FY 2025-26
• Applies to equity shares and equity-oriented MF units acquired before 31 Jan 2018
• Cost of acquisition = Higher of (actual cost, FMV on 31 Jan 2018)
• Gains up to 31 Jan 2018 are tax-free
• Only gains after that date taxed at 12.5% under Sec 112A

SIP Tax Complexity

• Each SIP instalment = separate purchase with own holding period
• FIFO (First In, First Out) applies on redemption
• For equity SIP of N months, on full redemption:
  • First max(0, N-12) instalments = LTCG
  • Last min(N, 12) instalments = STCG
• Tax optimization: Stop SIP, wait for last instalment to cross 12 months, then redeem

Key Budget 2024 Changes Summary

Sources

• Finance (No. 2) Act, 2024 — Sections 111A, 112, 112A amendments
• Finance Act 2023 — Section 50AA (debt fund taxation change)
• Income Tax Act, 1961 — Sections 111A, 112, 112A, 80C
• AMFI Tax Reckoner FY 2025-26
• Mirae Asset Tax Reckoner 2025-26
• Nippon India Tax Reckoner FY 2025-26
• incometax.gov.in — Income Tax slab rates
• ClearTax — Section 112A LTCG guide
• TaxGuru — Grandfathering provisions analysis

Verify

• Confirm no changes in Budget 2026 (expected February 2026) to MF taxation
• Check if SEBI circular on MF classification (equity >=65%) has any updates
• Verify gold fund-of-fund vs gold ETF holding period (should be same: 24 months)
• Confirm hybrid fund classification: >=65% equity = equity treatment, 35-65% = Sec 112, <35% = debt