Still confused about capital gains tax structure for mutual funds after the Budget? Here's a ready reckoner

Jul 27, 2024, 11:28:27 AM IST

Finance Minister Nirmala Sitharaman announced changes to the tax rates on financial assets on Tuesday in the budget.

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In case of equity mutual funds, the units with a holding period of more than 12 months were taxed at 15% (STCG) and 10% (LTCG). These units will now be taxed at 20% (STCG) and 12.5% (LTCG).

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Earlier the holding period was more than 36 months and these schemes were taxed as per investors' tax slab (LTCG and STCG). Now the holding period has been changed to more than 24 months and will continue to be taxed as per investors' tax slab (LTCG and STCG).

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Earlier the holding period for these schemes was more than 36 months and were taxed as per slab rate (LTCG and STCG). Now it has been changed to more than 24 months. The LTCG has been changed to 12.5% from as per tax slab rate whereas STCG remains unchanged.

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The holding period for overseas Fund of Funds (FoFs) has been reduced from more than 36 months to more than 24 months. The Long-Term Capital Gains (LTCG) tax rate has been adjusted to 12.5% from earlier of being taxed as per tax slab rate, while the Short-Term Capital Gains (STCG) tax rate remains unchanged.

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Earlier, the holding period for gold mutual funds was more than 36 months. However, in the recent budget announcement, the holding period has been reduced to more than 24 months. The LTCG, which was previously taxed as per the individual's tax slab rate, has now been fixed at 12.5%. The Short-Term Capital Gain (STCG) remains unchanged.

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