Investor education

Mutual fund tax planning guides

Plain-language guides on how mutual funds are taxed and the legal ways families can keep more of their returns. Each guide includes worked rupee examples for FY 2026-27 (tax rules as of September 2026).

Key tax rates at a glance

Investment	Short-term gains	Long-term gains
Equity funds and ELSS	20% (up to 12 months)	12.5% above ₹1.25 lakh a year (over 12 months)
Hybrid funds (35–65% equity)	Slab rate (up to 24 months)	12.5% (over 24 months)
Debt funds (bought from 1 April 2023)	Slab rate	Slab rate
Fixed deposits	Interest taxed every year at your slab rate

Plus applicable surcharge and 4% cess. Read the full taxation guide.

Start here

Start hereWhy Mutual Funds: Benefits and Goal-Based InvestingHow mutual funds help Indian families grow wealth: diversification, SIP compounding, liquidity, tax efficiency and a clear plan for every life goal. Tax basicsHow Mutual Funds Are Taxed in FY 2026-27Mutual fund tax rules for FY 2026-27: equity STCG 20%, LTCG 12.5% above ₹1.25 lakh, debt funds at slab rate, hybrid funds, IDCW dividends and TDS.

Keep more after tax

After-tax comparisonFD vs Equity Mutual Fund: What You Keep After TaxCompare fixed deposits and equity mutual funds after tax for a 30% slab investor: ₹10 lakh over 10 years, effective post-tax returns and when each fits. Timing mattersPay Tax Only When You Redeem: The Deferral AdvantageWhy mutual funds taxed on redemption can beat FDs taxed yearly, even at the same return and tax rate: a 10 and 20 year comparison. Tax-smart habitTax Harvesting: Use Your ₹1.25 Lakh Tax-Free Limit Every YearHow long-term capital gains harvesting works for equity mutual funds: book up to ₹1.25 lakh of gains every year tax-free and reinvest, with a worked example. Losses and set-offTurn Investment Losses into Tax SavingsHow to set off short-term and long-term capital losses against mutual fund gains, carry losses forward for 8 years, and use tax-loss harvesting.

Products that save tax

Tax-saving investmentELSS Tax Saver Funds: Save Tax and Grow WealthELSS explained for FY 2026-27: up to ₹1.5 lakh deduction under the old tax regime, 3-year lock-in, comparison with PPF, NSC and tax-saver FDs, and SIP lock-in rules. Retirement planningRetirement Income: SWP vs FD InterestHow a systematic withdrawal plan (SWP) can give retirees a regular monthly income with far less tax than FD interest, with a worked example and a three-bucket plan. Short-term moneyArbitrage Funds: Park Short-Term Money Tax-EfficientlyHow arbitrage funds work, how they are taxed like equity, and when they beat liquid funds for short-term money in the 20% and 30% tax slabs. Includes the Budget 2026 STT change.

Plan as a family

Family planningFamily Tax Planning: Multiply Your Tax-Free LimitsUse every adult family member's tax-free limits legally: ₹1.25 lakh equity gains each, clubbing rules for spouse and minors, gifts to relatives and practical steps. Family structuresHUF Tax Planning: A Second Set of Tax Allowances for Your FamilyHow a Hindu Undivided Family (HUF) saves tax in FY 2026-27: its own ₹4 lakh nil slab and ₹1.25 lakh LTCG exemption, how to fund it without clubbing, setup steps and drawbacks.

Please note: This guide is investor education, not tax or investment advice. Figures are illustrations using assumed returns and are not guaranteed. Tax rules shown apply for FY 2026-27 (tax rules as of September 2026) and can change; please confirm your own situation with a chartered accountant. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.

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