Taxability of profit on Sale of SIP Mutual Funds

This query is : Resolved

CA Sanjay Baheti (Querist)
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19 July 2010 My Client is investing under SIP Option In Reliance Mutual Funds on monthly basis @ Rs. 1000/- Total Amount of contribution Of Rs.12000/- during the period from Oct,2008 to oct,2009. Then he sold the same with a consideration of Rs.18568.79 in the month of Nov,2009.

My query is How the profit of Rs.6568.79 is to be taxed as income under which Head. if the same is to be taxed as capital gain then whether the same is short term or long term & How the period of holding counted.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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20 July 2010
If the eperiod of holding of any mutual fund is a year or more, the profit on sale of such Mutual Fund will be treated as Long Term Capital Gain.

In your case only the instalemnt psid on Oct 2008 qualify for one year period so any capital gain on transfer of units alloted on investment of Rs 1000 on Oct 08 will be LTCG and all other gain will be Short Term.

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