Income from mutual fund

"A" has made an investment in Mutual Fund on 13.09.2013 under Fixed Term Income Fund. The same is matured on 15.09.2016 i.e. 3 year 2 days. "A" has earned some net amount on his investment.

What is the treatment of this income to be taken under Income Tax ? Also, Please under which section & rule of Income Tax law it will be either taxable or exempted. 

Replies (4)
since the mutual fund was redeemed after 3 yrs...the same is long term and it would be exempt from tax

Thanks for your reply. kindly inform me the section under which this is exempt.

Period of Holding in case of Shares & Mutual Funds:
a. Less than 12 months- Short term
b. More than 12 months- Long term.
However, the period of holding for a Debt oriented Mutual Fund to be classified as Long Term has been increased from 12 months to 36 months in Budget 2014.
Long Term Capital Gains arising on the sale of Shares and Mutual Funds are exempted under Section 10(38) provided such transaction is chargeable to Securities Transaction Tax (STT).
This means taxability of long-term capital gain (LTCG) would depend on whether at the time of sale of shares, mutual funds the securities transaction tax (STT) has been paid or not. If you are liable to pay STT at the time of sale of shares on a recognized stock exchange, then the LTCG can be claimed tax-exempt.

LTCG exemption applies to only equity funds or also debt funds? Has one to pay tax on LTCG on debt fund on cap gains @ 20% of gain after indexation where request for redemption is made to the fund house.

Kindly clarify

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