Capital Gain Tax on Mutual Funds | Shares | Bonds | Debentures | Dividends | Interest | Taxpundit

Income and Capital Gains on Mutual Funds, Equity Shares, Bonds, Debentures etc. explained hereunder - 1. Tax Implication on Equity Shares : i. Dividend upto Rs. 10 lakh a year is tax free. Above that tax at 10% ii. Long Term Capital Gains exempt upto Rs. 1 lakh. Balance taxable at 10% without indexation iii. Short Term Capital Gains taxable at 15% if STT is paid by both buyer and seller 2. Tax Implication on Equity Mutual Fund : i. Dividend is Tax Free without any limit ii. Long Term Capital Gains exempt upto Rs. 1 lakh. Balance taxable at 10% without indexation iii. Short Term Capital Gains taxable at 15% if STT is paid by seller 3. Tax Implication on Debt Mutual Fund : i. Dividend is Tax Free without any limit ii. Long Term Capital Gains taxable at 20% with indexation iii. Short Term Capital Gains taxable at slab rate 4. Tax Implication on Listed Tax Free Bonds : i. Interest from Notified Tax Free Bonds is exempt from Tax ii. Long Term Capital Gains taxable at 10% without indexation iii. Short Term Capital Gains taxable at slab rate 5. Tax Implication on Listed Debentures : i. Interest from Debentures taxable unless notified ii. Long Term Capital Gains taxable at 10% without indexation iii. Short Term Capital Gains taxable at slab rate A. Meaning of Long Term Capital Gains Capital gain on sale of all listed securities in India mentioned above (other than debt-oriented MFs), held for more than 12 months are treated as LTCG. Unlisted shares and immovable property have to be held for more than 24 months to qualify for LTCG. In all other types of capital assets, including debt oriented MFs, sale after 36 months will qualify as LTCG. B. Meaning of Short Term Capital Gains When securities (listed other than a unit/equity oriented MF/zero coupon bonds) are held for up to a year, the gain is treated as STCG. For all other type of capital assets, holding up to 24/36 months will qualify as STCG. C. Set-Off Provisions for Capital Losses : a) Loss from transfer of a long term capital asset can be set off against gain from transfer of any other long term capital asset in the same year. But, long term capital loss cannot be set off against short term capital gains b) Loss from transfer of a short term capital asset can be set off against gain from transfer of any other capital asset in the same year c) Any unutilised capital loss after absorption in the same year can be further carried forward to next eight years and be utilised under the same conditions as above d) Return should be filed before July 31 to carry forward any losses Our website : www.taxpundit.org Like, share & subscribe. Thanks for watching.