1. What is Mutual Fund Withdrawal Tax?

Mutual Fund Withdrawal Tax refers to the capital gains tax applicable when redeeming mutual fund units in India. The tax rate varies based on holding period, fund type, and the amount of gains as per Indian tax laws for FY25-26.

2. How Does the Calculator Work?

The calculator uses the following tax calculation formula:

Where:

• \( Gains \) — Capital gains from mutual fund withdrawal (INR)
• \( LTCG\ Rate \) — Long Term Capital Gains tax rate (12.5% for equity funds with gains above ₹1.25L held for more than 1 year)
• Other rates apply for short-term holdings and debt funds

Explanation: The calculator considers Indian tax rules including exemption limits, holding periods, and different tax rates for equity vs debt funds.

3. Importance of Tax Calculation

Details: Accurate tax calculation helps in financial planning, understanding net returns from investments, and complying with Indian tax regulations for mutual fund redemptions.

4. Using the Calculator

Tips: Enter capital gains in INR, select holding period and investment type. The calculator will compute applicable tax based on current Indian tax laws for FY25-26.

5. Frequently Asked Questions (FAQ)

Q1: What is the tax rate for equity mutual funds held less than 1 year?
A: Short Term Capital Gains (STCG) tax of 15% applies to equity funds held for less than 1 year.

Q2: Is there any exemption for long term capital gains?
A: For equity funds, gains up to ₹1.25 lakh per financial year are exempt from LTCG tax.

Q3: What about debt mutual fund taxation?
A: Debt funds held for less than 3 years attract STCG tax as per income tax slab, while those held for more than 3 years attract 20% LTCG tax with indexation benefit.

Q4: How is the holding period calculated?
A: Holding period is calculated from the date of purchase to the date of redemption/sale of mutual fund units.

Q5: Are these tax rates applicable for FY25-26?
A: Yes, these rates are as per the current Indian tax laws for the financial year 2025-26.