What is the LTCG tax rate on equity mutual funds in India?
For FY 2025-26 (post Budget 2024 revision), Long Term Capital Gains (LTCG) on equity mutual funds and listed stocks are taxed at 12.5% on gains exceeding ₹1.25 lakhs per financial year. The holding period must be more than 12 months to qualify as long-term. Gains up to ₹1.25 lakhs per year are completely tax-free.
What is the STCG tax rate on mutual funds?
Short Term Capital Gains (STCG) on equity mutual funds and stocks (held less than 12 months) are taxed at 20% for FY 2025-26. For debt mutual funds, gains are added to your total income and taxed at your income tax slab rate.
How to calculate LTCG on mutual funds?
- Determine your purchase price (cost of acquisition) and selling price
- Calculate the capital gain: Selling Price − Purchase Price
- If held more than 12 months, apply the LTCG exemption of ₹1.25 lakhs
- Pay 12.5% tax on the remaining taxable gain (plus 4% cess)
For automatic tax computation, import your CAS statement into Arthavi — it generates per-fund and aggregated capital gains reports.
Frequently Asked Questions
What is the LTCG tax rate on equity mutual funds?
12.5% on gains above ₹1.25 lakhs per FY (holding period > 12 months). Gains below ₹1.25L are tax-free.
What is the STCG tax rate?
20% on equity (held < 12 months). Debt fund STCG is taxed at your income slab rate.
What is the difference between LTCG and STCG?
LTCG is for assets held over 12 months (equity); STCG for shorter. LTCG has lower rates and exemption limits.
How to save LTCG tax on mutual funds?
Plan redemptions to keep annual LTCG below ₹1.25 lakhs. Stagger sells across financial years. Tax-loss harvest losing positions against gains.