NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Ravi, a resident individual, redeems units of an equity-oriented mutual fund after holding them for 8 months and makes a gain of Rs 40,000. Applying the post-July 2024 rules, what is the tax rate on this gain, excluding surcharge and cess?
The gain is taxed at 20%. Equity-oriented fund units sold within 12 months produce short-term capital gains, and for transfers after 22 July 2024 these are taxed at 20% plus applicable surcharge and cess.
- A12.5%
- B20%Correct
- C15%
- DSlab rate
Explanation
Equity-oriented units held for 12 months or less produce short-term capital gains, taxed at 20% under section 111A for transfers after 22 July 2024. 12.5% applies to long-term gains, and 15% was the earlier short-term rate.
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