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Mutual fund partial redemption

Rajesh PB (80 Points)

10 May 2021

I have invested 200000 in a mutual fund on Jan 2021 (20000 units) unit price 10 rs

Later on March, have redeemed 8350 rs worth 800 units. Unit price 10.4375

Should I calculate capital gain?

Or it should be accounted only when it is redeemed completely?

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5 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 10 May 2021

Capital gains will not arise in this case as you have not sold the whole MF it is just a redeem part of your MF.

In general, Short Term Capital Gains with respect to mutual funds, are the gains or profits an individual makes on the sale of his or her mutual fund investments if the period of holding is less than twelve months. However, short term capital gains can be acquired on both equity mutual funds as well as debt mutual funds.

For Equity Mutual Funds: If an individual makes a profit on the sale or transfer of his or her equity mutual fund units before twelve months, then the profits are termed as short term capital gains.
For Debt Mutual Funds: If an individual makes a profit on the sale or transfer on his or her debt mutual fund units before the completion of three years, then the profits are termed as short term capital gains.

For short term capital gains:
15% on the sale of equity mutual funds
On the sale of non-equity mutual funds - As per the income tax slab rate of the investor. However, a 30% TDS rate will apply.