InvestorQ : What tax I have to pay if I change the Equity Mutual fund to debt funds with the same AMC?
krithika Saxena made post

What tax I have to pay if I change the Equity Mutual fund to debt funds with the same AMC?

Answer
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seema Upadhyaya answered.
6 months ago


If you are planning to switch from equity mutual funds to debt funds or vice-versa it would be treated as a sale of funds of one type and purchase of funds of another type. So, it will attract capital gain tax, if they are sold before a period of 12 months and there's a profit on the sale of funds under one method you'll have to pay short-term capital gain tax. In this case, you will also be liable to pay some exit load if your AMC charges the same.

However, if you are selling your funds after a period of one year, you'll be liable to pay Long-term capital gain tax.

These taxes are charged at special rates and shall be paid while paying income-tax and need not be paid separately or deducted from your gross receipt at the time of sale.

Now, when you purchase a fund of another nature, it would be treated as a purchase of investment and shall be liable to any tax only at the time of sale. Hence, you do not have to pay any tax on the purchase of funds.

The treatment of tax and deemed sale concept shall be the same whether you are selling and purchasing with the same AMC or different AMCs.