← Mutual Fund Taxation

beginner · 5 min

Capital gains basics

Short-term vs long-term

A capital gain is the profit when you redeem units for more than you paid. The holding period decides whether it's taxed as short-term or long-term, and equity vs debt funds have different thresholds and rates.

Tax is triggered only on redemption, not while you stay invested - another reason long-term holding is tax-efficient.