How are equity funds taxed?
Equity funds are funds that keep at least 65% in Indian shares (including equity index funds, ELSS and arbitrage funds).
If you sell within 12 months, the gain is short-term and taxed at 20%. If you sell after 12 months, the gain is long-term: the first ₹1.25 lakh of long-term gains in a financial year (across all your equity funds and shares) is tax-free, and the rest is taxed at 12.5%.
These are the rules for FY 2026-27. Tax rules change; please confirm with a tax adviser before acting.
Updated: