InvestorQ : Do you have to pay Tax Deducted at Source (TDS) on mutual fund redemptions?
Shobit Khurana made post

Do you have to pay Tax Deducted at Source (TDS) on mutual fund redemptions?

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Pratik vyas answered.
3 years ago
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No Unlike fixed deposits and recurring deposits, mutual funds redemptions do not attract tax deducted at source (TDS).

However, that doesn’t mean mutual funds are tax free. Each mutual fund, depending on which asset class it invests in and for how long it is held, attracts a different tax liability.

The table below explains how various mutual funds are taxed according to their asset classes.

Type of mutual fund

Short-term capital gains tax

Long-term capital gains tax

Equity mutual fund

15%

10% on amount in excess of Rs. 1 lakh

Balanced mutual funds

15%

10% on amount in excess of Rs. 1 lakh

Debt mutual funds

As per the tax slab

20% after indexation

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