In this lecture, we discuss the taxes applicable on mutual fund investments. Now, the tax laws will be different for every country. So, we can only discuss the tax laws as applicable in India. In India, two type of taxes apply on mutual fund investments, they are short term and short term capital gains tax and long term capital gains tax. Now, taxes will be applicable when the mutual fund is sold. Now, if the mutual fund is sold regularly, taxes will be applicable also when they are sold through is WP or SDP, the taxes will be applicable.

Short term capital gains taxes are applicable in the mutual funds are held for less than 12 months. That is before 12 months have elapsed from the date of purchase the mutual fund in the mutual fund is sold, then short term capital gains tax is applicable the rate of short term capital gains tax Presently is 15%. Now, even if the person falls in the 10% tax bracket in India, for short term capital gains tax 15% tax rate is applicable. In 2018, Government of India introduced long term capital gains tax, before that there was long term capital gains tax was not there. Now, long term capital gains tax is applicable if there are mutual funds are held for more than 12 months. Actually any investment in the share market if it is held for more than 12 months, it is long term capital gains tax is applicable.

However, long term capital gains tax is applicable only if the total sale value is more than one lakh net present. The long term capital gains taxes rate charged at 10%