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Redemption of mutual fund

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Querist : Anonymous

Querist : Anonymous (Querist)

24 January 2013 Sir,
I have been investing in Mutual Fund since 3 years through SIP. To the best of my knowledge longterm capital gain for morethan 1 year in equities and mutual fund is taxfree. So suppose the units through SIP which I bought have completed 1 year and suppose i redeem all such units that the whole capital gain would be exempted ? e.g. Suppose I invested Rs.30000/- thru SIP whose market value is Rs.42000/- then would i have to pay any tax on RS.12000/- ? please answer

Anand

Anand (Expert)
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24 January 2013 If the units you are selling have completed one year, then they will be designated as Long Term Capital Assets.
However, the capital gain on LTCA is exempt only if STT is paid at the time of sale.
In case STT is not paid, then you can index the market value and then compute capital gains

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