Taxation Guide
Mutual Funds
Equity Mutual Funds:
- STCG (<12 months): 15% + cess
- LTCG (>=12 months): 10% (above Rs.1 lakh exempt annually)
Debt Mutual Funds:
- Post-April 1, 2023: All capital gains taxed as per slab rate (Indexation removed)
Hybrid & Multi-Asset Funds:
- Equity-oriented (>=65% equity): Taxed like equity funds
- Debt-oriented: Taxed like debt funds
Stocks (Direct Equity)
Delivery-Based Trades:
- STCG (<12 months): 15%
- LTCG (>=12 months): 10% (Rs.1 lakh exemption/year)
Dividend Income:
- Taxed as per slab rate
- TDS applicable if dividend > Rs.5,000/year
Intraday Trading (Speculative Income)
- Buy/sell same day without delivery
- Taxed as Speculative Business Incom
- Slab rate applicable
- Audit if turnover > Rs.10 crore or profit <6% of turnover
Futures & Options (F&O)
- Taxed as Non-Speculative Business Income
- Tax rate: As per slab
- Audit if turnover > Rs.10 crore or profit <6%
- Expenses allowed: brokerage, rent, internet, etc.
Arbitrage Funds
- Treated as Equity Mutual Funds
- STCG (<12 months): 15%
- LTCG (>=12 months): 10% (Rs.1 lakh exemption)
- Tax-efficient for short-term parking
Liquid Funds
- Treated as Debt Mutual Funds
- Gains taxed at slab rate (post-April 2023)
- Less tax-efficient than before
Tax Planning Tips
- Use SWP from debt funds for regular income
- Arbitrage/equity funds for short-term parking
- Use loss harvesting to offset gains
- Keep proper records and seek expert filing help