Frequently Asked
Questions

No. Tax is applicable only when you redeem, switch, or withdraw from your mutual fund. Merely holding the investment does not trigger any tax liability.

A) Growth plans: In Growth Plan, profits and incomes are reinvested back in the scheme, and tax arises only at the time of redemption of such units as capital gains.

B) IDCW plans: In IDCW Plans, tax is applicable only at the time of each distribution, and the entire IDCW amount is added to your income and taxed as per your slab. TDS is  deducted by mutual fund as per the applicable TDS rates.

No. Taxation rules are same for both sip and lumpsum investments. However, each SIP instalments is treated as a separate investment for capital gains calculation. So, the holding period and tax computation is done for each SIP separately.

Exit Load is a fee charged by the AMC when you redeem or switch out of a mutual fund before a *pre-defined period. in simple terms think of exit load like a small fine if you take out your money too soon, it’s like when you break a FD early and bank charges small penalty for it.

Note :* pre-defined period differs from scheme to schemes.

Securities Transaction Tax or STT, is a type of direct tax levied by the Government of India on the sale or purchase of securities. Generally, the STT is associated with stock investments. Still, it also applies to equity-oriented mutual funds when investors sell their units.

Only equity-oriented mutual funds attract STT. No STT is applicable on the sale and purchase of debt-oriented funds. When an investor sells their units on a stock exchange or redeems them by selling them back to the fund house, STT is charged at 0.001% of the total value at which the units are sold.

The STT in mutual fund transactions is always borne by the seller of the units whether they sell their units on the stock exchange or redeem them through the fund house. In the case of units that can be traded on the market, like exchange-traded funds or closed-ended funds, the seller pays 0.001% STT on the sale price. 

A) Equity-oriented mutual funds (>=65% Equity) / Gold ETF / Silver ETF /International ETF/ Equity-oriented hybrid funds(>=65% Equity).

Short-Term Capital Gains (STCG)- If units are held for the period up to12 months, such units are considered short-term capital Asset as per the provisions of the Income Tax Act 1961 and on Redemption, gain from such units will be considered as short-term capital gain.

 Long-Term Capital Gains (LTCG)- For units held for the period more than 12 months, gains are considered Long-term capital Asset as per the provisions of the Income Tax Act 1961 and on and on Redemption, gain from such units will be considered as Long-term capital gain.

B) Specified MF / Debt Oriented MF (>65% Debt and Money Market Instruments)/ Hybrid MFs with >65% Debt

If Investment made prior to 01-04-2023

Short-Term Capital Gains (STCG)- If units are held for the period up to 24 months, such units are considered short-term capital Asset as per the provisions of the Income Tax Act 1961 and on Redemption, gain from such units will be considered as short-term capital gain.

Long-Term Capital Gains (LTCG)- For units held for the period more than 24 months, gains are considered Long-term capital Asset as per the provisions of the Income Tax Act 1961 and on Redemption, gain from such units will be considered as Long-term capital gain.

If Investment made on or after 01-04-2023

Irrespective of the period of holding capital gain from the redemption of such units will be considered as short-term Capital Gain.

Please click on this link tax-reckoner.pdf and refer capital gain tax rates for all Quantum mutual funds Schemes 

Indexation is a process of adjusting the purchase price of an investment to reflect the effect of inflation on it. It allows the taxpayer to take in to account the impact of inflation on cost of acquisition, which can reduce the amount of capital gains that would be taxed.

 From 23rd July 2024, indexation is no longer available for any investor. Gains from debt mutual funds are taxed at slab rate, even for long-term holdings.

Systematic withdrawal plans (SWPs) is a facility offered by the Mutual fund that allows investors to withdraw fixed amounts of money at regular intervals (Monthly, Quarterly, etc..) from their existing investment in the mutual fund scheme.

Each withdrawal under SWP is taxed based on the holding of period of the units sold. The gain is calculated using FIFO (First-In-First-Out) method and capital gain will be applicable which may LTCG or STCG depend upon the period of holding.

Yes, as per the provisions of section 74 of income tax act 1961, it can be adjusted as follows

Losses on short term capital asset can be set off against both short term capital gain and long-term capital gain.

Losses on long term capital asset can be set off only against LTCG.

Unadjusted losses can be set off and carried forward for the period of 8 years if ITR is filed within the due date as provided in income tax act 1961.

Yes. For only for resident individuals under section 112A of income Tax Act 1961, LTCG from units of equity-oriented mutual funds is exempt up to ₹1.25 lakh per financial year. Gains beyond ₹1.25 lakh are taxed at 12.5%. without indexation.

Switching of mutual fund units from one scheme to another scheme will be treated as ‘Redemption’ in the existing scheme and will be considered as Fresh Purchase in the new scheme, even if both the schemes belong to the same AMC.  Such a switch will be considered taxable and capital gain will be applicable which may be LTCG or STCG depending upon the period of holding

Example: A Investor invested Rs1,00,000 in Quantum Liquid Fund on 12-06-2024 and on 02-07-2025 it switches to Quantum Value Fund. In this case, in the Quantum Liquid Fund it will be considered as redemption on 02-07-2025 and in it will be considered as fresh investment in Quantum Value Fund from 02-07-2025 .

Switching of mutual fund units from Regular scheme to Direct scheme will be treated as ‘Redemption’ in the Regular scheme and will be considered as Fresh Purchase in the Direct scheme, even if both the schemes belong to the same AMC.  Such a switch will be considered taxable and capital gains tax applies short-term or long-term depending on how long you held the units in regular plan.

Under new tax regime you cannot claim deduction for Section 80C of the income tax act 1961, Investments which includes ELSS investment also.

Yes, it is taxable and added to your total income

Only for residents, TDS is not deducted if total IDCW is less than ₹10,000 in a financial year. For NRIs, TDS applies regardless of amount.

Please click on this link tax-reckoner.pdf to view TDS rates on redemption for NRIs. Effective from 23 July 2024

In terms of section 56(2)(x) of the Act, any property (other than immovable property) transferred without consideration or for an inadequate consideration (as provided in section 56(2)(x)(c) of the Act) will be taxable in the hands of recipient assessee. The term “property” includes shares and securities. Units of a mutual fund could fall within the purview of the term “securities”.

Income Tax Slab for FY 2025-26 (AY 2026-27) is as follows

Income Tax Slab Rate for New Tax Regime

The following tables show the Revised Income Tax Slabs. The table for the new tax regime slabs-

Income Tax Slab Rate for Old Tax Regime

The table for the old tax regime slabs-

Income Tax Slab for People Between 60 to 80 Years

Income Tax Slab for People More than 80 Years