Tax Saving; ELSS

How mutual funds are taxed ?

Profits or gains arising from transfer of an asset, also known as a ‘capital asset’, such as mutual funds, property, gold, shares, and bonds are considered as capital gains and are taxed under the income head ‘capital gains’.

Such capital gains are of two types—short-term capital gains (STCG) and long-term capital gains (LTCG)—depending on the period of holding. Both these categories attract a different set of capital gains tax rates, depending on the asset type.

Here we will only discuss capital gains tax on mutual funds.