Income from mutual funds

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SUBHASH MISHRA (Querist)
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18 September 2017 Respected sir,
A person makes investment in Mutual funds through SIP. He does not show any income of mutual funds every year. On maturity of that he gets lump sum amount. My question is that whether that whole amount is taxable or difference amount (Maturity amount – Investment amount) is taxable ?
If that amount is taxable then under which section or if it exempt then under which section?
Please guide

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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18 September 2017 Sir, First, Mutual fund gains are Never, Never taxed on accrual basis. It is taxed only when realized.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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18 September 2017 When you redeem/sell your investments, tax will be levied on the gains that you make i.e Sales - Cost.

Based on investment in which kind of fund, equity or debt, taxes will be Long term or short term in nature

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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18 September 2017 If you sell your investments in equity funds within 365 days from date of purchase, the gains are short term in nature and are taxable. If you sell them after 365 days, it is long term in nature and not at all taxable

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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18 September 2017 For debt funds, it is short term in nature if investments are redeemed within 3years. Long term if the investments are redeemed after 3 years

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