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Kumar R. (Executive)     24 September 2009

Income Tax on Mutual Fund SIP

How to know whether a particular MF bought under SIP attracts Income Tax or Not on its redemption.

Bought Following Mutual Funds under SIP. If I sell these today, Will there be any income tax payable or Not as these should be treated as Long Term Capital Gain (STT paid by icicidirect). -- Please Clarify.

Plan Type - Investment

1. SUNDARAM BNP PARIBAS SELECT MIDCAP - GROWTH (Rs. 2000 started Jan'07 - Period - 12 months) 

2. HDFC EQUITY FUND - GROWTH PLAN (Rs. 1000 started Jan'07 - Period -12 months)

3. RELIANCE VISION FUND - GROWTH PLAN - GROWTH OPTION (Rs 1000 started Jan'07 - Period -12 months)

4. ICICI PRUDENTIAL INFRASTRUCTURE FUND - GROWTH (Rs 2000 started Jan'07 - Period - 6 months)

Please clarify on redemtion how much tax is payable. OR Tax  payable is Nil




 2 Replies

Anil Agrawal (Retired)     03 October 2009

 Please contact your Mutual Fund.

Vineet (Director)     09 October 2009

No capital gains is payable on redemption of equity mutual fund or balanced fund having predominant equity flavour, if the investment is held for more than one year. Otherwise, short term capital gains tax @15% is payable in respect of gains on only those units held for less than one year.

In respect of debt funds or income funds Long term mutual fund @20% (10% without indexation benefits) payble if units held for more than one year. For investements held for period less than 1 year, short term capital gain shall be added to your income under other heads and taxed at marginal rate on income tax.

All the MFs mentioned by you are equity funds. No tax payable one year has elapsed after the last SIP instalment on date of redemption.

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