Mutual Fund Taxation Rules (Finance Act 2024) — Equity, Debt & Hybrid Explained
The Finance Act 2024 updated how gains from mutual funds are taxed. These rules apply for ITR filing of FY 2024–25 (AY 2025–26). A key reference is the cut-off date: 23-07-2024. Below is a quick, SEO-friendly guide with a one-view comparison table and plain-English notes for equity-oriented, specified (debt-heavy), and other (hybrid/FOF) funds.
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💳 Open FREE Demat (Angel One) 📲 Download IPOFocus App 📢 Join Telegram (Daily Updates)📊 One-View Tax Comparison (After Finance Act 2024)
| Fund Category | When Purchased/Sold | Holding Period | Tax on Gains | Indexation |
|---|---|---|---|---|
| Equity Oriented >65% equity | Sold before 23-07-2024 | ≤ 12 months | STCG @ 15% | Not available |
| Equity Oriented | Sold before 23-07-2024 | > 12 months | LTCG @ 10% (exemption note*) | Not available |
| Equity Oriented | Sold on/after 23-07-2024 | ≤ 12 months | STCG @ 20% | Not available |
| Equity Oriented | Sold on/after 23-07-2024 | > 12 months | LTCG @ 12.5% (exemption note*) | Not available |
| Specified MF >65% debt | Invested after 01-04-2023 | Any | Slab Rate | Not applicable |
| Specified MF | Invested before 01-04-2023 & sold before 23-07-2024 | ≤ 36 months | Slab Rate | — |
| Specified MF | Invested before 01-04-2023 & sold before 23-07-2024 | > 36 months | LTCG @ 20% | With indexation |
| Specified MF | Invested before 01-04-2023 & sold on/after 23-07-2024 | ≤ 24 months | Slab Rate | — |
| Specified MF | Invested before 01-04-2023 & sold on/after 23-07-2024 | > 24 months | LTCG @ 12.5% | Without indexation |
| Other MF Hybrid/FOF | Sold before 23-07-2024 | ≤ 36 months | Slab Rate | — |
| Other MF | Sold before 23-07-2024 | > 36 months | LTCG @ 20% | With indexation |
| Other MF | Sold on/after 23-07-2024 | ≤ 24 months | Slab Rate | — |
| Other MF | Sold on/after 23-07-2024 | > 24 months | LTCG @ 12.5% | Without indexation |
*Equity LTCG exemption: Up to ₹1,25,000 per financial year on equity-oriented funds is exempt from tax.
How This Affects Your Redemptions
- Prefer holding equity funds over 12 months to benefit from lower LTCG.
- For older debt/hybrid units (bought before 01-Apr-2023), check if your holding period qualifies for indexation before the cut-off.
- Plan STP/SWP with the new 24-month/12-month thresholds in mind.
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Open FREE Demat (Angel One) Download IPOFocus App Join Telegram ChannelDisclaimer: Tax rules can change. Consult a tax professional for personalized advice.
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