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Time of India
2 days ago
- Business
- Time of India
Mutual fund taxation for AY 2025-26: Latest capital gain tax rules for equity mutual funds, debt mutual funds, international mutual funds, gold mutual funds, others
Academy Empower your mind, elevate your skills Capital gain rules from equity mutual funds Old Rule (Till July 22, 2024) New Rule (From July 23, 2024) Equity Mutual Funds STCG: 15% LTCG: 10% (above ₹1.25L exemption) STCG: 20% + cess LTCG: 12.5% (above ₹1.25L exemption) Debt Mutual Funds Purchased on or before Mar 31, 2023: STCG: Slab rate (if < 36 months) LTCG: 20% with indexation (if > 36 months) Purchased on or after Apr 1, 2023: Taxed at slab rate regardless of holding period Purchased till Mar 31, 2023 & sold on or after July 23, 2024: STCG: Slab rate (if < 2 years) LTCG: 12.5% without indexation (if > 2 years) Purchased on or after Apr 1, 2023: Same as before – slab rate regardless of holding Hybrid Mutual Funds Equity ≥ 65%: Taxed like equity mutual funds Equity < 65%: Taxed as per slab rate (like debt funds) Same treatment based on equity %: Equity ≥ 65%: Use new equity MF rules Equity < 65%: Slab rate (like debt) Gold Mutual Funds Taxed as per income tax slabs Same as old – taxed as per slab rate International Mutual Funds Taxed as per income tax slabs Same as old – taxed as per slab rate Fund of Funds (FoFs) If taxed like equity: Use old equity rules If taxed as slab: Apply slab rate Same rule continues: Equity-like FoFs – use new equity rules Others – slab rate ETFs (non-equity based) STCG: Slab rate (if sold ≤ 1 year) LTCG: 10% (if sold > 1 year, no indexation) STCG: Slab rate (if sold ≤ 1 year) LTCG: 12.5% (if sold > 1 year, no indexation) Capital gain rules for debt mutual funds Debt mutual fund investments made on or after April 1, 2023 Debt mutual fund investments made till March 31, 2023 Capital gain rules from hybrid mutual funds Capital gain rules for gold mutual funds Capital gain rules from international mutual funds Capital gain rules from Fund of Funds (FoF) mutual funds Capital gain rules from ETF investments Capital gains rule will change for these mutual fund investments from April 1, 2025 The capital gain tax rule for various categories of mutual funds has been updated in FY 2024-25. The new capital gain tax rules for mutual funds will stay in effect till they are changed again by the Wealth online spoke with Naveen Wadhwa, Vice-President of Research & Advisory at to understand the old and new capital gains tax rules for different categories of mutual funds. The rules mentioned below apply to individuals whose residential status is either Resident but ordinarily resident (ROR) or Resident but not ordinarily resident (RONR).The mutual fund capital gains taxation rules mentioned below are for the FY 2024-25 (AY 2025-26). These rules will help you to understand the capital gains tax calculation while filing income tax return (ITR) this says, "For taxation purposes, mutual funds are categorised as equity mutual funds and non-equity mutual funds. The new and old rules for the computation of capital gains from equity mutual funds are the same as those for listed shares. In the case of non-equity mutual funds, there are different taxation rules. This depends on the date of purchase and date of sale. Some of the non-equity mutual funds are debt mutual funds , hybrid mutual funds, international mutual funds and gold mutual funds ."Also Read: Capital gains tax ready recknor for house property, listed shares, unlisted shares for FY 2024-25 A mutual fund is categorised as an equity mutual fund if a scheme holds a minimum of 65% of its assets in equity and equity-related gains arising from the sale of equity mutual funds can be termed as short-term or gains from equity mutual funds are termed short-term capital gains (STCG) if they are sold on or before the completion of one year. These STCG are taxed at 20% plus gains are termed long-term capital gains (LTCG) if they are sold after the completion of one year. The LTCG is taxed at 12.5%.LTCG up to Rs 1.25 lakh in a financial year is exempted from tax. Hence, no tax is payable if the LTCG does not exceed Rs 1.25 lakh. This limit applies to the aggregate amount of long-term capital gains from equity mutual funds and listed equity shares. This means you will need to pay 12.5% LTCG tax only on the gains above Rs 1.25 equity mutual funds sold between April 1, 2024, and July 22, 2024, the old STCG and LTCG rules will categorisation of capital gains as STCG and LTCG based on the period of holding remains the same under both the old and new rules. STCG refers to those equity mutual funds that are sold on or before the completion of one year of purchase. LTCG refers to those equity mutual funds that are sold after one year from the date of rates for STCG and LTCG are different under the old rules. Under the old rules, LTCG from equity mutual fund is taxed at 10% without indexation benefit. STCG from an equity mutual fund is taxed at a rate of 15%.For the financial year 2024-25, the aggregate limit of Rs 1.25 lakh will apply for LTCG exemption on equity mutual funds and listed shares, irrespective of the date of sale. This tax needs to be paid only on the gains above Rs 1.25 lakh in the given financial capital gains from debt mutual funds, two key dates matter: the date of purchase and the date of sale. Here is a look at how the date of purchase and sale impacts your capital rules for taxing capital gains from debt mutual funds were revised starting April 1, 2023. The current capital gains rule applies to investments made on or after April 1, 2023. Since then, the rules for taxing capital gains from debt mutual funds have not changed. Currently, gains from debt mutual funds are taxed at income tax slabs applicable to their income, irrespective of the holding if your debt mutual fund investments were made on or before March 31, 2023?According to experts who spoke with ET, if debt mutual funds are purchased on or before March 31, 2023, the capital gains rules apply differently. This will depend on the date of debt mutual fund investments made till March 31, 2023, and sold on or before July 22, 2024, then capital gains will either be termed as STCG or capital gains will be termed as STCG if the debt mutual funds are sold on or before the completion of 36 months (three years). STCG will be taxed at the income tax slabs applicable to your gains from debt mutual funds will be referred to as LTCG if these are sold after the completion of 36 months (three years). LTCG on these debt mutual funds will be taxed at 20% with added indexation process of adjusting the purchase price to account for inflation by inflating costs is called debt mutual fund investments made till March 31, 2023, and sold on or after July 23, 2024, the capital gain rules are says, "Debt mutual funds sold on or after July 23, 2024 (that were purchased till March 31, 2023), will have no indexation benefit. The LTCG from these debt mutual funds (sold after the completion of two years) will be taxed at 12.5% without indexation. STCG from these debt mutual funds (if sold before the completion of two years) will be taxed at income tax slabs."Also Read: No indexation benefit if the debt mutual funds are sold on or after July 23, 2024 Hybrid mutual funds come in three types: conservative, balanced, and aggressive. The taxation of these categories of hybrid mutual fund depends on the securities held by the fund manager in the scheme per SEBI guidelines, these funds should have an allocation of between 65% and 80% to equities and between 20% and 35% to debt and other instruments, such as per SEBI guidelines, balanced hybrid mutual funds should have an allocation between 40% to 60% of total assets in equity and debt. No arbitrage would be permitted in this funds will have an allocation of between 75% and 90% to debt instruments and between 10% and 25% to equities, as per SEBI says, "For income tax purposes, mutual funds having a minimum equity allocation of 65% or more will be taxed in the same fashion as normal equity mutual funds."If the hybrid mutual fund is taxed like an equity mutual fund, then knowing the date of redemption is essential to determine the correct tax rate. This is because the tax rate for equity mutual funds is different under the old and new capital gains rules. However, if the hybrid mutual fund is taxed according to the income tax slabs, then there are no changes in the old and new capital gains rules. The date of redemption does not affect the calculation of capital gain tax for FY 2024-25 (AY 2025-26).Wadhwa says, "Other hybrid mutual funds having a minimum equity allocation of less than 65%, then capital gains from such mutual funds will be taxed at the income tax slabs applicable to your income. However, the taxation rule that will apply to your investment will depend on the date of investment and the date of sale. This is similar to how debt mutual fund taxation is mentioned above."Gold mutual funds in India typically invest in gold ETFs (Exchange-Traded Funds).Wadhwa says, "Capital gains from gold mutual funds are taxed at the income tax slabs. The old and new rules are the same for capital gain taxation from gold mutual funds. Here also, investors should be mindful of the date of investment and the date of sale to know the correct rules for capital gains taxation. This is also similar to debt mutual funds." This rule is applicable for AY mutual funds primarily invest in foreign equities. Wadhwa says, "Capital gains from international mutual funds are taxed at the income tax slabs. The old and new rules are the same for capital gain taxation from international mutual funds. Here also, investors should be mindful of the date of investment and the date of sale to know the correct rules for capital gains taxation. This is also similar to debt mutual funds." This rule is applicable for AY mutual funds invest in other funds. According to SEBI, "A Fund of Funds (FoF) invests in other funds. Investment in these funds helps investors spread their risks across various markets and asset classes while benefiting from professional fund management. A Fund of Funds is essentially a "fund made up of funds." It pools money from investors and invests it in a collection of other mutual funds, or exchange-traded funds (ETFs). By doing so, it provides a diversified investment portfolio managed by experts."Examples of FoF are - ICICI Prudential Thematic Advantage Fund (FoF), Aditya Birla Sun Life Asset Allocator FoF, Quantum Multi Asset Fund of the FoF mutual fund is taxed like an equity mutual fund, then knowing the date of redemption is essential to determine the correct tax rate. This is because the tax rate for equity mutual funds is different under the old and new capital gains rules. However, if the FoF mutual fund is taxed according to the income tax slabs, then there are no changes in the old and new capital gains rules. The date of redemption does not affect the calculation of capital gain tax for FY 2024-25 (AY 2025-26).Wadhwa says, "Where capital gains from the FoF mutual funds are taxed at the income tax slabs, the old and new rules are the same for capital gain taxation. Here also, investors should be mindful of the date of investment and the date of sale to know the correct rules for capital gains taxation. This is also similar to debt mutual funds." This rule is applicable for AY stand for Exchange Traded Funds. An individual can invest in these funds via their Demat accounts. ETFs are listed on stock exchanges. There are various types of ETFs, such as for stocks, debt, gold, new capital gains rules have simplified the asset class, as listed and unlisted securities, as well as non-financial assets. Based on the asset class, the holding period is the new rules, capital gains from listed securities are classified as long-term capital gains (LTCG) if the securities are sold after one year has passed. Otherwise, the gains are short-term capital gains from unlisted securities and non-financial assets are classified as long-term capital gains (LTCG) if the asset is sold after two years from the date of purchase. Otherwise, the gains are short-term capital to Wadhwa, "As ETFs are listed on the stock exchanges, the capital gains will be classified as LTCG provided units are sold after completion of one year. These LTCGs will be taxed at 12.5% without indexation benefit. STCGs arising from the sale of ETF units on or before the completion of one year will be taxed at the income tax slabs. This taxation will apply to all ETFs, where the underlying assets are other than equity shares. However, this new rule will apply to ETF units sold on or after July 23, 2024."Wadhwa further adds, "For ETF units sold on or before July 22, 2024, the gains will be taxed at 10% without indexation benefits, provided units are sold after completion of one year for gains to qualify as LTCG. In case gains are STCG, then it will be taxed at income tax slabs."The government has revised the definition of debt mutual funds in the Income Tax Act from April 1, 2025. As per the new definition, a debt mutual fund will invest more than 65% of its total proceeds in debt and money market instruments or a fund-of-funds with the underlying having a similar debt investment mix. The new definition came into effect on April 1, 2025. Earlier, the specified debt mutual fund was defined as a mutual fund where not more than 35% of its total proceeds are invested in the equity shares of domestic to this change of definition, taxation of specific mutual fund investments made on or after April 1, 2025, is impacted. These specific mutual funds are - International mutual funds, Gold mutual funds, Balanced hybrid funds, and fund of funds (where the debt portion is less than 65%).Wadhwa says, "Investments made on or after April 1, 2025, in the specified mutual fund schemes where the debt instruments are less than 65% will have different taxation rules. Under the new rule, gains will be termed LTCG if the mutual fund units are sold on or after the completion of two years. LTCG will be taxed at 12.5%. On the other hand, STCG of these mutual fund units will be taxed at the income tax slabs. For investments made in these mutual fund schemes between April 1, 2023, and March 31, 2025, the gains will be taxed at the income tax slabs, irrespective of the holding period. If investments made in these schemes on or before March 31, 2023, are held, then capital gains mutual fund units sold after the completion of two years will be classified as LTCG. This LTCG will be taxed at 12.5% without the indexation benefit. Else, gains will be termed as STCG and taxed at income tax slabs."
News18
6 days ago
- Business
- News18
Taxation Rules For Silver ETFs In India: What Investors Need To Know
Last Updated: Exchange-traded funds are investment products that track assets like gold or silver and are convenient options due to factors like their liquidity and low storage risk. The 2024 Union Budget has introduced several taxation reforms for gold and silver investments. The government has simplified the taxation structure and slashed the Customs Duty from 15 per cent to 6 per cent to make these investments more affordable. There are many ways to invest in these precious metals, including holding them physically. Many people prefer digital assets such as exchange-traded funds (ETFs) due to their liquidity and no storage-related risks. Gold and silver ETFs are backed by physical holdings. To invest in these, people can trade them on brokerage platforms just like stocks. One can also opt for the ETF Fund of Funds (FoFs), which are like mutual funds and invest in underlying ETFs. While more accessible, the new tax rules may make it difficult to understand how these investment tools are taxed. This is mainly because the new rules apply from a certain date and the investment holding period can impact the amount of tax one needs to pay. For FY25, typically one may think that the revised rules apply to units redeemed between April 1, 2024 and March 31, 2025. However, due to 2024 being the Lok Sabha election year, the full budget was introduced only in July. Hence, the rules for the revised taxation norms came into effect on July 23, 2024. Redeemed between July 23, 2024 and March 31 Redeemed after March 31 The holding period for silver ETF is 12 months, which means gains are treated as short or long-term based on this duration. – If held for under 12 months (short-term capital gains): Taxed based on the investor's income tax slab rate – If held for over 12 months (long-term capital gains): Taxed based on the investor's income tax slab rate Case 2: Redeemed after March 31 – If held for under 12 months (short-term capital gains): Taxed based on the investor's income tax slab rate – If held for over 12 months (long-term gains): 12.5 per cent To be clear, the holding period for ETF FoFs is 24 months, which means that gains made from units held for less than two years in these funds are treated as short-term gains. In addition, applicable tax based on the holding period, the capital gains may attract a 4% cess, along with a possible surcharge if your income exceeds specified thresholds under tax laws. view comments Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Hans India
13-07-2025
- Business
- Hans India
Maharashtra: Skill Development Centre to be set up at Aurangabad Industrial City
New Delhi: A 20,000 sq. ft. Skill Development Centre is set to be established at Aurangabad Industrial City (AURIC) in partnership with the Confederation of Indian Industry (CII), for which an MoU is expected to be signed next week, according to an official statement issued on Sunday. Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Amardeep Singh Bhatia, confirmed the project during his visit to Chhatrapati Sambhaji Nagar to review the progress of industrial infrastructure and development of startups in the region. The Secretary emphasised the need to attract Global Capability Centre (GCC) investments and foster the development of Research and Development centres at AURIC to further enhance the region's innovation and industrial ecosystem. Stakeholders also recommended the convergence of Pradhan Mantri Awas Yojana 2.0 subsidies with state housing policies to offer a comprehensive package for inclusive residential development, thereby supporting the growth of a well-rounded industrial township. The visit also included an industry interaction session chaired by the Secretary at AURIC Hall, which witnessed participation from key stakeholders, including industry bodies such as MASSIA, CMIA, CII, FICCI, and ASSOCHAM. During the discussion, stakeholders suggested measures such as improved connectivity between Aurangabad-Hyderabad-Chennai, development of an MRO facility and Vande Bharat terminal, better logistics access at Bidkin, local train services between Jalna and Waluj, affordable housing via MHADA, and a dedicated chemical zone, the statement said. Recommendations also included increasing MSME land reservation from 10 per cent to 40 per cent, reserving 10 per cent land for startups, and strengthening soft infrastructure and skill development at AURIC. P. Anbalagan, Secretary, Industries Department, Government of Maharashtra, also presented the state's strategic vision for industrial growth through initiatives like MITL and MMLP. The Secretary's visit began with an interactive session at the Marathwada Accelerator for Growth and Incubation Council (MAGIC), where he engaged with budding entrepreneurs, incubators, and startup founders from the region. He appreciated their innovative spirit and highlighted the Government's strong support through initiatives like Startup India, Fund of Funds, and sector-specific incentives aimed at boosting the startup ecosystem, especially in Tier-2 and Tier-3 cities. The secretary also visited the Bidkin Industrial area, where he reviewed key infrastructure sites including JSW Green-Tech Ltd, Toyota Kirloskar facility, and the Water Treatment Plant. His visit further progressed to the Shendra Industrial Area, where he toured key industrial units including NLMK India, Hyosung T and D Pvt. Ltd., and Coatall Films Pvt. Ltd. He appreciated their role in driving high-value manufacturing and generating employment, contributing significantly to the vision of Viksit Bharat@2047. Besides, he took stock of the industrial infrastructure at AURIC, including the Water Treatment Plant, Integrated Command and Control Centre (ICCC), the state-of-the-art AURIC Hall, and the 3D city model of Shendra. Bhatia reiterated that collaboration between government and industry is essential to position Maharashtra as a global hub for manufacturing and innovation. The session witnessed active participation from Industry Associations and the Government of Maharashtra, reinforcing their shared commitment to catalysing industrial growth in the region, the statement added.
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Business Standard
05-07-2025
- Business
- Business Standard
India allocates additional ₹10,000 crore to support deep tech sector
Commerce and Industry Minister Piyush Goyal on Saturday said the government has provided an additional Rs 10,000 crore as part of the Fund of Funds scheme to further support and promote deep tech research and startups. 'Having now committed the entire first tranche of Fund of Funds of Rs 10,000 crore in the last Budget, another Rs 10,000 crore has been provided,' Goyal said at an event organised by IIT Madras and the institute's alumni association in Bengaluru. 'This time around, it's largely going to support the deep tech ecosystem. We are just formulating the guidelines and the full money goes to promote innovation, absorption of newer technologies and the deployment of newer tech in contemporary fields,' he added. The government announced in its Budget in February of setting up such a fund to catalyse the next generation startups as a part of this initiative. There were also some concerns that the private sector's expenditure on research and development (R&D) remained low despite a lot of incentives provided. Goyal has repeatedly advocated Indian entrepreneurs to pivot from being the back office of the world to a leader in technology and innovation. His comments come at a time when India's Startup Policy Forum has launched #100DesiDeepTechs, a multi-stakeholder initiative aimed at identifying and supporting 100 leading deep-tech startups in India. Developed in collaboration with Startup India (DPIIT), MEITY Startup Hub, and IIT Madras, the programme seeks to strengthen policy dialogue and advance India's deep-tech ecosystem. The initiative is accepting applications from Indian deep-tech startups. Selected participants will join closed-door policy discussions with industry and government stakeholders, leading to a white paper with regulatory recommendations. Focus areas include semiconductors, defence, quantum tech, green hydrogen, space, drones, EVs, biotech, robotics, advanced manufacturing, and communications. A Mentor Board consisting of founders, investors, policymakers, and experts will advise the #100DesiDeepTechs cohort, providing strategic guidance and access to networks. A white paper will be released at 'Deeptech Baithak', a forum of founders, investors, and policymakers. The event will also mark the launch of SPF's Centre for deep-tech policy research, which will support ongoing policy efforts. The deep-tech sector saw a huge surge in funding in 2024, up 78 per cent to $1.6 billion, compared to a year earlier. This was fuelled by supportive government policies, rapid advancements in Gen AI and innovations from emerging companies, according to a report by Nassscom and Zinnov. Goyal explained that India was not hesitant to use new age technology. 'It helps us to climb the growth chart and buck the trend in a slowing global trade environment.'
Time of India
05-07-2025
- Business
- Time of India
RDI scheme: Government aims to 'jumpstart India's R&D ecosystem'; offer low-interest funding for startups
This is an AI-generated image, used for representational purposes only. India's newly approved Research Development and Innovation (RDI) scheme, with a massive Rs 1 lakh crore corpus, is set to provide a major boost to private sector R&D and deep-tech startups by making long-term, affordable financing accessible for high-impact innovation projects, a senior government official said. The scheme, approved by the Union cabinet on July 1, is designed to ease funding constraints and foster a robust domestic innovation ecosystem. A senior government official cited by news agency PTI said that the RDI scheme is structured to help companies access long-term, low or nil-interest financing for high-risk, high-tech research projects. The initiative will also support equity-based funding for startups and facilitate the creation of a deep-tech Fund of Funds. The corpus will be managed through a Special Purpose Fund under the Anusandhan National Research Foundation (ANRF), with Rs 20,000 crore already allocated in the Union Budget for FY26. The government will provide a 50-year interest-free loan to the fund, which will further allocate capital to second-level fund managers, including AIFs, NBFCs, and Focused Research Organisations. The official further said that the aim is to help India "jumpstart its R&D ecosystem" by creating a mechanism where ministries can propose relevant technologies for inclusion under the scheme. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Secure Your Child's Future with Strong English Fluency Planet Spark Learn More Undo 'Any ministry that wants a technology included under the scheme can send a proposal to the department of science and technology,' the official added. The department of science and technology will act as the nodal agency for implementation and will issue detailed operational guidelines. These will include provisions to ensure effective capital recycling so that private sector RDI efforts continue to receive support over time. India currently spends just 0.65% of its GDP on R&D, significantly below the global average of 2.7%, and far lower than countries like Israel (6.3%) and South Korea (5%). According to officials, one of the key objectives is to change the perception in the private sector that R&D is a cost rather than an investment. Union minister Ashwini Vaishnaw said the scheme will also fund transformative, higher technology readiness projects, and assist in acquiring critical or strategically significant technologies. 'By addressing the critical need of the private sector for long-term, affordable financing, the RDI Scheme fosters self-reliance and global competitiveness,' he stated. The scheme will be overseen by multiple layers of governance. The governing board of ANRF, chaired by the Prime Minister, will provide strategic direction. An Executive Council under ANRF will approve project scopes and second-level fund managers. Meanwhile, an empowered group of secretaries headed by the cabinet secretary will periodically review the scheme's performance and recommend changes. Officials stressed that selected fund managers will include experts from industry, academia, finance, and technology sectors, ensuring that project evaluations remain independent and effective. Launched under the broader umbrella of Startup India , the RDI scheme adds another critical layer to India's ambition to become a global innovation powerhouse by 2047. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
