Taxability of mutual fund return

Tax queries 156 views 4 replies

I have purchased SBI Balanced Mutual Fund for 5 years which gives quarterly dividend. Please tell me the taxability of such return.

Replies (4)

Dividend is tax exempt.

And any gain over and above value (dated 31.03.2018) will be taxed at 10% (over and above 1 lakh), when the units are redeemed.

It means at the time of maturity if the opening units (i.e at the time of purchase) are less than the closing units (i.e at the time of maturity), then the diffrence between the units is taxable as LTCG if the value of gain is more than Rs. 1 lakh. Am I right?

Units will not change until you redeem any unit. (only its rate change with market fluctuation).

When redemption of any units take place, no. of units will reduce to that extent.

Now for calculation of LTCG (whenever more than 12 months holding period) redemption proceeds is taken into account and not number of units that are not redeemed.

For whatever units redeemed, the value of gains is calculated in rupees, which is taxable at 10% when it exceeds Rs. 1 lakh.

Thank you very much for your quick and informative response.


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