Capital Gains on Equity Mutual Funds: Tax Rates and Set-Off Rules

Gains from equity-oriented mutual funds held for more than 12 months are taxed at 12.5 percent LTCG (Section 112A) up to Rs 1.25 lakh per financial year. Above that, the excess is fully taxable. STT must have been paid on the purchase and sale of the units. Set-off: LTCG can only be set off against LTCG; STCG against STCG and LTCG. Carry-forward of LTCG is allowed for 8 assessment years if not fully set off in the year of sale.