Question
How is capital gains tax on mutual funds calculated in FY 2026-27?
Answer
Bottom line: Equity funds are taxed at 20% short-term and 12.5% long-term above ₹1.25 lakh, while debt funds are taxed at your slab rate.
1. Equity funds
Held under 12 months, STCG is 20% (Section 111A); over 12 months, LTCG is 12.5% on gains above ₹1.25 lakh (Section 112A).
2. Debt funds
Units bought on or after 1 April 2023 are always taxed at your slab rate, with no long-term benefit or indexation.
3. Shared limit
The ₹1.25 lakh exemption is shared with listed shares.
Compute it with our Capital Gains Tax Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.