How is Capital Gains Tax calculated on SIP investments

POSTED BY Rohit Gangadharan ON July 1, 2011 8:42 pm COMMENTS (3)

First, Hello to one and all, I am an avid reader of this forum and would like to thank everyone in advance for sharing the knowledge you guys have on financial matters!!!

My question is regarding Capital gains tax on SIP investments, I am trying to understand how they would be taxed as the investment is staggered. Say for example I started a SIP in 2009 and I invested 1000 RS on a monthly basis for 3 years and in 2011 I am selling the Mutualfund how would the tax be calculated, would I benifit from LTCG tax exemption or would I be liable for Tax. I am not sure how valid this question is, please excuse me if this is a very dumb question!! I am learining and any knowledge is good knowledge!!!

3 replies on this article “How is Capital Gains Tax calculated on SIP investments”

  1. Which mutual funds is this ? Is it equity oriented ? If yes ,then there is no tax on your profits

    If its debt , then there wil be indexation applicable to it :


    1. Trishit Ray says:

      Hello Manish,

      Thanks for helping all of us.It’s a relief that Rohit will get LTCG benefit as he sold his equity mf after one year.Does he need to mention the profits from the equity mf redemption as income from other sources(or by any other name) in the IT return?

      Though this thread is old, I came here just now and your reply would educate many who will come later.



      1. bg says:

        The Profits from EQUITY MF would be categorised in two classes: Long Term Capital Gains(LTCG) and Short Term Capital Gains(STCG) depending on the holding period before redemption. If units are held for more than ONE year before being redeemed, then it would be LTCG and if redeemed within ONE year from the date of investment, it would be STCG.
        On redemption, STT (Securities Transaction Tax) would be levied, and this would reflect in the CAPITAL GAINS ACCOUNT STATEMENT, which the investor should procure from the Fund House.
        STCG on MF units where STT is paid, would be taxed under section 111A at 15%. For reflecting this in the Return, the investor has to fill ITR-2. And within ITR2, schedule CG(CAPITAL GAINS) has to be filled. Take care to fill the Right column, as there are columns for both NRIs and Resident Indians. I assume he is a resident Indian. He should choose the correct column and fill in the particulars CAREFULLY. Help of a tax professional must be taken if not clear on the procedure to fill Sch. CG.
        As for the LTCG on Equity MF, they are EXEMPT from tax.That is, there is NO Income tax on that BUT you MUST FILL THE EXEMPT INCOME column, of ITR-1 or ITR-2 and MUST MUST MUST MUST SHOW IN THE ITR in the EXEMPT income COLUMN, the LTCG from EQUITY Mfs.
        Exempt income column appears in all the ITRs

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