{"id":12314,"date":"2026-08-25T10:24:27","date_gmt":"2026-08-25T04:54:27","guid":{"rendered":"https:\/\/www.fatakpay.com\/blog\/?p=12314"},"modified":"2026-08-25T10:24:30","modified_gmt":"2026-08-25T04:54:30","slug":"long-term-capital-gain-tax-on-mutual-funds","status":"publish","type":"post","link":"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/","title":{"rendered":"Long-Term Capital Gains Tax\u00a0(LTCG)\u00a0Tax on Mutual Funds: Rates\u00a0&#038;\u00a0How to Calculate\u00a0"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_86 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Key_Takeaways\" >Key Takeaways&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#What_is_LTCG_Tax_on_Mutual_Funds\" >What is LTCG Tax on Mutual Funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#LTCG_Tax_Rates_on_Mutual_Funds\" >LTCG Tax Rates on Mutual Funds&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Long_Term_Capital_Gain_Tax_on_Mutual_Funds_Holding_Periods_Explained\" >Long Term Capital Gain Tax on Mutual Funds: Holding Periods Explained&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Tax_on_Long_Term_Capital_Gain_on_Mutual_Fund_How_It_Is_Calculated\" >Tax on Long Term Capital Gain on Mutual Fund: How It Is Calculated&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#FAQs_on_LTCG_Tax_on_Mutual_Funds\" >FAQs on LTCG Tax on Mutual Funds&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#What_is_LTCG_tax_on_mutual_funds\" >What is LTCG tax on mutual funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#How_much_LTCG_is_tax_free_on_mutual_funds\" >How much&nbsp;LTCG is&nbsp;tax free on mutual funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#What_is_the_holding_period_for_long-term_capital_gains_on_mutual_funds\" >What is the holding period for long-term capital gains on mutual funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Is_indexation_still_available_on_debt_mutual_funds\" >Is indexation still available on debt mutual funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#How_are_long_term_capital_gains_calculated\" >How are long term capital gains calculated?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/#Do_I_pay_LTCG_tax_if_I_switch_between_schemes\" >Do I pay LTCG tax if I switch between schemes?&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>LTCG tax on mutual funds depends on the fund type and holding period, so the same investment period can receive different tax treatment across schemes.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Equity-oriented mutual funds\u00a0generally qualify\u00a0for long-term treatment after more than 12 months, while other categories may follow different rules.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible equity-oriented mutual fund gains can receive an annual \u20b91.25 lakh exemption under Section 112A, subject to the applicable conditions.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The 2024 tax changes altered the treatment of several mutual fund categories, including the rules around rates, holding periods, and indexation.\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A mutual fund switch can have tax implications because switching is\u00a0generally treated\u00a0as a redemption or transfer of the original investment.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Always verify the latest tax rules before redeeming units,\u00a0particularly for\u00a0debt and specified mutual funds. The applicable provisions can depend on the fund&#8217;s classification and acquisition date.\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The rules for\u00a0LTCG tax on mutual funds\u00a0changed significantly in 2024, so older articles can give you outdated answers. LTCG stands for\u00a0long term capital gain, which applies when eligible mutual fund units are sold after the applicable long-term holding period. This guide explains the current rates, holding periods, annual exemption, and\u00a0a simple worked calculation. The information has been checked against current Income Tax Department guidance.\u00a0\u00a0\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_LTCG_Tax_on_Mutual_Funds\"><\/span><strong>What is LTCG Tax on Mutual Funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">LTCG tax on mutual funds is the tax charged on a long-term capital gain earned when eligible mutual fund units are redeemed or transferred. The applicable treatment depends primarily on what the mutual fund invests in and how long you hold the units.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equity-oriented mutual funds have a specific long-term holding threshold and are covered by Section 112A when applicable. Other mutual fund categories can fall under different rules, including the provisions for specified mutual funds.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can also refer to a guide on&nbsp;<a href=\"https:\/\/www.fatakpay.com\/blog\/tax-planning\/how-to-file-income-tax-return-online\/\" target=\"_blank\" rel=\"noopener\"><strong>how to file your income tax return online<\/strong><\/a>&nbsp;when reporting your capital gains.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"LTCG_Tax_Rates_on_Mutual_Funds\"><\/span><strong>LTCG Tax Rates on Mutual Funds<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">\u200b\u200b\ufffc\u200b\u200b\ufffc\u200b\u200b\ufffc\u200bThe 2024 changes simplified the general long-term capital gains rate to 12.5% for many assets, while equity-oriented funds covered by Section 112A have a separate annual exemption. The treatment of specified mutual funds also depends on the statutory definition applicable to the investment.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>As of August 17, 2026<\/strong>&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Fund Type<\/strong>&nbsp;<\/td><td><strong>Long-Term Holding Period<\/strong>&nbsp;<\/td><td><strong>LTCG Rate<\/strong>&nbsp;<\/td><td><strong>Annual Exemption<\/strong>&nbsp;<\/td><\/tr><tr><td>Equity-oriented mutual funds covered by Section 112A&nbsp;<\/td><td>More than 12 months&nbsp;<\/td><td>12.50%&nbsp;<\/td><td>\u20b91.25 lakh&nbsp;<\/td><\/tr><tr><td>Other mutual fund units where Section 112 applies&nbsp;<\/td><td>Generally&nbsp;more than&nbsp;24 months, subject to the applicable asset classification&nbsp;<\/td><td>12.50%&nbsp;<\/td><td>No general \u20b91.25 lakh Section 112A exemption&nbsp;<\/td><\/tr><tr><td>Specified mutual funds covered by Section 50AA&nbsp;<\/td><td>Depends on the applicable statutory definition and acquisition date&nbsp;<\/td><td>Taxed under applicable short-term capital gain rules&nbsp;<\/td><td>Not applicable as LTCG&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The Income Tax Department&#8217;s current return guidance confirms the \u20b91.25 lakh Section 112A threshold and the 12.5% rate applicable to long-term gains under the relevant provisions.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While capital gains are taxed separately from normal income in many cases, understanding&nbsp;the&nbsp;<a href=\"https:\/\/www.fatakpay.com\/blog\/tax-planning\/income-tax-slabs-and-rates-for-fy-2026-27\/\" target=\"_blank\" rel=\"noopener\"><strong>current income tax slabs and rates<\/strong><\/a>&nbsp;can help you assess your overall tax liability.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Long_Term_Capital_Gain_Tax_on_Mutual_Funds_Holding_Periods_Explained\"><\/span><strong>Long Term Capital Gain Tax on Mutual Funds: Holding Periods Explained<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Equity-oriented mutual funds:<\/strong>\u00a0Units generally need to be held for more than 12 months to qualify as long-term capital assets.\u00a0The Income Tax Department specifically\u00a0identifies\u00a0units of equity-oriented mutual funds among assets with a 12-month threshold.\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Other mutual fund categories:<\/strong>\u00a0The applicable threshold can be different. For assets covered by the 24-month rule, holding them for more than 24 months makes them long-term.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Specified mutual funds:<\/strong>\u00a0Section 50AA can result in gains being treated as short-term based on the statutory definition, so investors should not assume that every debt-oriented fund receives conventional LTCG treatment.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, an 18-month holding period can produce different tax&nbsp;treatment&nbsp;depending on the type of mutual fund.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equity-oriented schemes, including&nbsp;what ELSS funds are, can qualify for the equity-specific capital&nbsp;gains&nbsp;treatment when the applicable conditions are met.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_on_Long_Term_Capital_Gain_on_Mutual_Fund_How_It_Is_Calculated\"><\/span><strong>Tax on Long Term Capital Gain on Mutual Fund: How It Is Calculated<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Consider an equity-oriented mutual fund where the applicable Section 112A rules apply. Suppose you bought units for \u20b94 lakh and later redeemed them for \u20b96 lakh. Your capital gain is \u20b92 lakh. After applying the \u20b91.25 lakh annual exemption, \u20b975,000&nbsp;remains&nbsp;taxable at 12.5%, before considering any applicable surcharge and&nbsp;cess.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Particulars<\/strong>&nbsp;<\/td><td><strong>Amount<\/strong>&nbsp;<\/td><\/tr><tr><td>Purchase value&nbsp;<\/td><td>\u20b94,00,000&nbsp;<\/td><\/tr><tr><td>Redemption value&nbsp;<\/td><td>\u20b96,00,000&nbsp;<\/td><\/tr><tr><td>Long-term capital gain&nbsp;<\/td><td>\u20b92,00,000&nbsp;<\/td><\/tr><tr><td>Section 112A exemption&nbsp;<\/td><td>\u20b91,25,000&nbsp;<\/td><\/tr><tr><td>Taxable gain&nbsp;<\/td><td>\u20b975,000&nbsp;<\/td><\/tr><tr><td>Tax at 12.5%&nbsp;<\/td><td>\u20b99,375&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The calculation assumes the units qualify for Section 112A&nbsp;treatment&nbsp;and the exemption has not already been used against other eligible gains. When considering&nbsp;<a href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/mutual-fund-redemption\/\" target=\"_blank\" rel=\"noopener\"><strong>how mutual fund redemption works<\/strong><\/a>, remember that units are&nbsp;generally accounted&nbsp;for on a first-in-first-out basis, so the units sold&nbsp;determine&nbsp;the applicable holding period.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">LTCG tax on&nbsp;<a href=\"https:\/\/www.fatakpay.com\/invest-in-mutual-funds\" target=\"_blank\" rel=\"noopener\"><strong>mutual funds<\/strong><\/a>&nbsp;cannot be&nbsp;determined&nbsp;from the fund name alone. The applicable rate and holding period depend on what the scheme holds, how long you owned the&nbsp;units&nbsp;and which provisions apply to the gain. The rules were&nbsp;substantially changed&nbsp;in 2024, making the date of any tax information particularly important. Before redeeming investments, verify the current provisions and consider your overall tax position. Explore&nbsp;FatakPay&nbsp;for tools and resources that can help you make more informed financial decisions.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_LTCG_Tax_on_Mutual_Funds\"><\/span><strong>FAQs on LTCG Tax on Mutual Funds<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_LTCG_tax_on_mutual_funds\"><\/span><strong>What is LTCG tax on mutual funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">LTCG tax on mutual funds is the tax payable on eligible long-term capital gains from selling or redeeming mutual fund units. The applicable rate depends on the type of fund, holding&nbsp;period&nbsp;and relevant tax provision.&nbsp;Equity-oriented funds can qualify for the Section 112A exemption.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_much_LTCG_is_tax_free_on_mutual_funds\"><\/span><strong>How much&nbsp;LTCG is&nbsp;tax free on mutual funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Up to Rs 1.25 lakh of eligible Section 112A long-term capital gains can qualify for the annual exemption. This exemption applies to qualifying equity-oriented investments and is not a&nbsp;blanket&nbsp;exemption for every type of mutual fund. The applicable rules should be checked before calculating your tax liability.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_holding_period_for_long-term_capital_gains_on_mutual_funds\"><\/span><strong>What is the holding period for long-term capital gains on mutual funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The holding period depends on the type of mutual fund. Equity-oriented mutual fund units&nbsp;generally require&nbsp;a holding period of more than 12 months for long-term treatment. Other categories can have different rules, while specified mutual funds may be governed by Section 50AA.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_indexation_still_available_on_debt_mutual_funds\"><\/span><strong>Is indexation still available on debt mutual funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Indexation is&nbsp;generally not&nbsp;available for debt mutual fund gains under the post-2024 tax framework where the applicable provisions remove that benefit. The exact treatment depends on the fund&#8217;s classification, acquisition&nbsp;date&nbsp;and applicable transitional rules, so investors should verify the provisions relevant to their specific units.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_long_term_capital_gains_calculated\"><\/span><strong>How are long term capital gains calculated?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Long-term capital gains are&nbsp;generally calculated&nbsp;by subtracting the eligible cost of acquisition and applicable adjustments from the redemption or transfer value. The resulting gain is then tested against the relevant exemption and tax rate. For equity-oriented funds, Section 112A provides the applicable framework where its conditions are met.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Do_I_pay_LTCG_tax_if_I_switch_between_schemes\"><\/span><strong>Do I pay LTCG tax if I switch between schemes?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, a switch between mutual fund schemes can trigger a taxable capital gain because it is&nbsp;generally treated&nbsp;as a transfer or redemption of the original units. The tax treatment depends on the units being switched, their holding period and the applicable capital gains provisions.&nbsp;<\/p>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\/\", \n  \"@type\": \"BreadcrumbList\", \n  \"itemListElement\": [{ \n    \"@type\": \"ListItem\", \n    \"position\": 1, \n    \"name\": \"Home\", \n    \"item\": \"https:\/\/www.fatakpay.com\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 2, \n    \"name\": \"Blog\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 3, \n    \"name\": \"Mutual Funds\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 4, \n    \"name\": \"Long-Term Capital Gains Tax (LTCG) Tax on Mutual Funds: Rates & How to Calculate\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/\" \n  }] \n} \n<\/script>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\", \n  \"@type\": \"BlogPosting\", \n  \"mainEntityOfPage\": { \n    \"@type\": \"WebPage\", \n    \"@id\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/\" \n  }, \n  \"headline\": \"Long Term Capital Gain (LTCG) Tax on Mutual Funds\", \n  \"description\": \"LTCG Tax on Mutual Funds - Understand how long-term capital gains tax applies across different mutual fund types, including rates, holding periods, and tax rules.\", \n  \"image\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\", \n  \"author\": { \n    \"@type\": \"Organization\", \n    \"name\": \"FatakPay\", \n    \"url\": \"https:\/\/www.fatakpay.com\" \n  }, \n  \"publisher\": { \n    \"@type\": \"Organization\", \n    \"name\": \"FatakPay\", \n    \"logo\": { \n      \"@type\": \"ImageObject\", \n      \"url\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\" \n    } \n  }, \n  \"datePublished\": \"2026-08-25\", \n  \"dateModified\": \"2026-08-25\" \n} \n<\/script>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\", \n  \"@type\": \"FAQPage\", \n  \"mainEntity\": [{ \n    \"@type\": \"Question\", \n    \"name\": \"What is LTCG tax on mutual funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"LTCG tax on mutual funds is the tax payable on eligible long-term capital gains from selling or redeeming mutual fund units. The applicable rate depends on the type of fund, holding period and relevant tax provision. Equity-oriented funds can qualify for the Section 112A exemption.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"How much LTCG is tax free on mutual funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Up to Rs 1.25 lakh of eligible Section 112A long-term capital gains can qualify for the annual exemption. This exemption applies to qualifying equity-oriented investments and is not a blanket exemption for every type of mutual fund. The applicable rules should be checked before calculating your tax liability.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"What is the holding period for long-term capital gains on mutual funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"The holding period depends on the type of mutual fund. Equity-oriented mutual fund units generally require a holding period of more than 12 months for long-term treatment. Other categories can have different rules, while specified mutual funds may be governed by Section 50AA.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"Is indexation still available on debt mutual funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Indexation is generally not available for debt mutual fund gains under the post-2024 tax framework where the applicable provisions remove that benefit. The exact treatment depends on the fund's classification, acquisition date and applicable transitional rules, so investors should verify the provisions relevant to their specific units.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"How are long term capital gains calculated?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Long-term capital gains are generally calculated by subtracting the eligible cost of acquisition and applicable adjustments from the redemption or transfer value. The resulting gain is then tested against the relevant exemption and tax rate. For equity-oriented funds, Section 112A provides the applicable framework where its conditions are met.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"Do I pay LTCG tax if I switch between schemes?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Yes, a switch between mutual fund schemes can trigger a taxable capital gain because it is generally treated as a transfer or redemption of the original units. The tax treatment depends on the units being switched, their holding period and the applicable capital gains provisions.\" \n    } \n  }] \n} \n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways&nbsp; The rules for\u00a0LTCG tax on mutual funds\u00a0changed significantly in 2024, so older articles can give you outdated answers. LTCG stands for\u00a0long term capital gain, which applies when eligible mutual fund units are sold after the applicable long-term holding period. This guide explains the current rates, holding periods, annual exemption, and\u00a0a simple worked calculation.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[697],"tags":[],"class_list":["post-12314","post","type-post","status-publish","format-standard","category-mutual-funds"],"_links":{"self":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/comments?post=12314"}],"version-history":[{"count":1,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12314\/revisions"}],"predecessor-version":[{"id":12315,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12314\/revisions\/12315"}],"wp:attachment":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/media?parent=12314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/categories?post=12314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/tags?post=12314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}