Mutual Fund Taxes: Know Before You Invest! Equity, Debt, Hybrid Rules Explained

• Mutual fund tax applies to profits from selling/redeeming units, not on investment or holding.
• Equity funds (over 65% equity): LTCG (>1 year) taxed at 12.5% (₹1.25 lakh annual exemption); STCG (<1 year) at 20%.
• Debt funds (under 35% equity): Taxed as per investor's income tax slab, irrespective of holding period.
• Hybrid funds often qualify for equity taxation if equity exposure is over 65% (e.g., aggressive hybrid, Balanced Advantage, Equity Savings Funds).
• Gold ETFs (LTCG >12 months) taxed at 12.5%; Gold/Silver FoF (>24 months). Dividends (IDCW) are fully taxable as per income slab.

Why It Matters: Understand mutual fund tax rules (equity, debt, hybrid, gold, dividends) for informed investment and better returns.