Now Reading: Income Tax Return: Are capital gains from MFs taxed differently under new & old regime? What taxpayers should know about new LTCG, STCG rules
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Income Tax Return: Are capital gains from MFs taxed differently under new & old regime? What taxpayers should know about new LTCG, STCG rules
Income Tax Return: Are capital gains from MFs taxed differently under new & old regime? What taxpayers should know about new LTCG, STCG rules
Income Tax Return Filing AY 2025-26: One essential facet of revenue tax return submitting, aside from reporting revenue from wage, can also be filling in particulars of any capital gains – short-term or long-term – that you’ve got made in the course of the monetary yr.If you’re questioning whether or not taxation of capital gains made from mutual funds differs between the new and the old revenue tax regime, we have now you coated.
Capital Gains From MFs: How Does Taxation Work?
Capital gains from sale of mutual funds (MFs) are taxable In India, under each the old and new revenue tax regimes. The categorization of the MF, methodology of computation of capital gains, just isn’t impacted by the selection of the revenue tax regime by a person. “All the deductions available while computing the capital gains, including towards reinvestment in the specified new asset, continue to be equally available under both the new and old income tax regimes,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.Also Read | ITR e-filing FY 2024-25: What is the good thing about pre-filled ITR varieties on the revenue tax portal? Top factorsIn common, from a taxability perspective, MFs are broadly categorized into fairness MFs and non-equity MFs. There can also be a particular class of specified MFs throughout the non-equity MFs.Parizad Sirwalla tells TOI, “Effective 23 July 2024, gains from sale of equity MFs, if held for more than 12 months, are classified as Long-term (LTCG) and gains (exceeding Rs 1.25 lakh) are taxable at 12.50%. Short Term Capital Gains (STCG) from sale of equity MFs are taxable at 20%.”
- Gains from sale of non – fairness MFs, held for greater than 24 months, are thought-about LTCG and taxable at 12.50%.
- STCG from sale of non-equity MFs are taxable as per the revenue tax slab charges.
- Further, gains from specified MFs are deemed to be STCG regardless of the holding interval and taxable as per the tax slab charges. Applicable surcharge and cess apply on the above tax charges
“The tax slab rates, surcharge rates and applicable rebates, will apply qua the tax regime chosen. The maximum surcharge under the old tax regime is 37% (triggers beyond income of Rs 5 crore) while under the new regime it is restricted to 25% (triggers beyond income of Rs 2 crore). It may be noted that under both tax regimes, surcharge is restricted to 15% on all LTCG and STCG on equity MF,” Parizad Sirwalla provides.Also Read | ITR e-filing AY 2025-25: What is Annual Information Statement (AIS) and the way is it totally different from Form 26AS? Top factors for taxpayers
