Taxes on SIP or Mutual Fund or Stock redemptions/Selling

POSTED BY Pratibha ON December 1, 2012 7:17 am COMMENTS (5)

Friends,

In a layman term,  can someone explain if we have to pay taxes if we sell the units accumulated via SIP Mutual Investment or Direct Mutual Fund investment.  Same applies to Stock too.

I heard Some Equity Mutual Fund after 3 year no tax.

To make it simple, do i have to pay tax if i redeem below MF after 3 years…

HDFC PRUDENCE

BIRLA SUNLIFE FRONTLINE

DSL BLACKROCK TOP 100 EQUITY FUND

HDFC TOP 200

RELIANCE REGULAR SAVING EQUITY FUND

 

 

 

Thanks

 

5 replies on this article “Taxes on SIP or Mutual Fund or Stock redemptions/Selling”

  1. BanyanFA says:

    A very simple and comprehensive article on affect of taxation on Mutual Fund investments can be found at http://insight.banyanfa.com/tax-implications-of-mutual-funds-on-residents-and-nris/

  2. Pratibha says:

    Thank you..

  3. TheZionView says:

    yes if you sell after 1 year both profit/loss and principal is tax free

  4. Pratibha says:

    Thank you Rosh.

    Very basic question. In the Equity MF, if we invest say 50K and after 1 years, it becomes 65K, with 15 K as capital gain and when i redeem, i hope no tax on the invested amt i.e 50k and also on 15k capital again. Please correct me…

  5. Rosh says:

    Dear Pratibha,

    In equity MF, LTCG >365 days is Tax free on capital gain, STCG <365 days is Taxed @15% on capital gain.

    In debt MF, Taxation depends on indexation, 10% Tax without indexation & 20% Tax with indexation on capital gain.

    In order to understand more on MF taxation read http://www.tflguide.com/2011/12/mutual-fund-taxation-in-india.html

    Thanx

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