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Taxation of Mutual Funds after Budget 2018


Fund TypeLong term durationTax rate on Short Term GainTax rate on Long Term GainTax on dividends
Equity Funds (including ELSS Funds)1 Year15%10% no indexation*10%**
Debt Funds (including Liquid Funds)3 YearYour Personal Income Tax Rate20% after indexation*25%
Arbitrage Funds1 Year15%10% no indexation*10%**
Balanced Funds1 Year15%10% no indexation*10%**
Other Hybrid Funds/MIPs3 YearYour Personal Income Tax Rate20% after indexation*25%
Gold Funds3 YearYour Personal Income Tax Rate20% after indexation*25%

* LTCG in Stocks and Equity Mutual Funds upto 1 lakh in a financial year will be tax free. Tax at 10% applies to total LTCG exceeding 1 lakh at a PAN level for a financial year. LTCG tax rate was 0% earlier.

For existing equity investments, price as on 31st January 2018 will be considered as the base price for computing LTCG.

** Dividend tax rate was 0% earlier for Stocks and Equity Mutual Funds. Cess will be levied on top of the tax.