Income Tax on Capital Gain on Investment in Mutual Funds

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Key Amendments introduced to the Finance Bill 2023


New Tax Slab Rates w.e.f 01.04.2023

Applicable slab rate irrespective of Holding period. However, can claim set off against short term capital losses.


Any capital gain on
Investments made after 1 April 2023
in Mutual funds
where the domestic equity allocation is 0-35%
would be taxed as short-term capital gains as per slab rate,
irrespective of holding period.

Following categories fall under the new tax ambit:

  1. All debt Mutual funds
  2. Gold ETF
  3. International funds irrespective of the structure - ETFs, Index funds, FoFs, etc
  4. Global offshore funds domiciled outside India
  5. Conservative Hybrid Funds

Present Tax Slab Rates

  1. Holding period of >= 3Y: LTCG @ 20% with indexation benefit 

  2. Holding period of <3Y: STCG at slab rate


Summary:






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