Mutual Fund Tax Calculator
Use this free mutual fund tax calculator to find the tax on your redemption in FY 2026-27. It covers equity funds, debt funds and the rule for funds bought after 1 April 2023, cess included.
| Detail | Amount |
|---|---|
| Sale / Redemption Value | |
| Cost Used for Tax | |
| Capital Gain | |
| Holding Period | |
| Gain Type and Rate | |
| LTCG Exemption Used | |
| Taxable Gain | |
| Tax before Cess | |
| Cess @ 4% | |
| Total Tax Payable | |
| Amount You Keep After Tax |
How to Calculate Tax on Mutual Fund Redemption
Tax is charged only when you redeem, switch or receive a payout from a mutual fund. Holding a fund for years without selling creates no tax bill at all.
The calculation always runs in the same four steps. First find the gain, then the holding period, then the fund category, and finally apply that category rate.
For a SIP, every instalment has its own purchase date and its own holding period. The fund house statement and your capital gains report already split this for you, so use those figures at filing time.
Redemption through a monthly withdrawal plan works the same way. Every withdrawal is part sale of units, so gains inside it are taxed. You can estimate those withdrawals with our SWP Calculator before you start the plan.
Mutual Fund Tax Rates in India – FY 2026-27
Equity funds and debt funds are taxed very differently. Equity funds get fixed concessional rates, while short-term debt gains simply join your salary and other income.
| Fund Type | Holding Period | Tax Rate |
|---|---|---|
| Equity Fund – Short Term | 12 months or less | 20% |
| Equity Fund – Long Term | More than 12 months | 12.5% above ₹1.25 lakh per year |
| Debt Fund bought before 1 Apr 2023 – Short Term | 24 months or less | Your income tax slab |
| Debt Fund bought before 1 Apr 2023 – Long Term | More than 24 months | 12.5% without indexation |
| Specified Fund bought on or after 1 Apr 2023 | Any period | Your income tax slab |
Every figure above also carries 4% health and education cess. Surcharge can apply at very high incomes, and on these capital gains it is capped at 15%.
Property, shares and gold follow a different rate table. For those assets, use our separate Capital Gains Tax Calculator instead of this page.
LTCG on Mutual Funds – the ₹1.25 Lakh Yearly Exemption
Long-term gains on equity funds are not taxed from the first rupee. The first ₹1.25 lakh of such gains in a financial year is fully exempt, and 12.5% applies only on the part above it.
This is why this tool also works as an LTCG calculator for mutual funds. Enter your full-year equity gains, and the exemption is removed before the rate is applied.
The exemption is per financial year, not per fund or per redemption. If you redeem in parts across two years, each year gets its own fresh ₹1.25 lakh limit.
Units bought before 1 February 2018 get one extra protection. Their cost is stepped up to the 31 January 2018 value, so gains earned before that date escape tax. Enter that value in the optional field above.
Debt Mutual Fund Tax After 1 April 2023
Funds holding 35% or less in equity shares are called specified mutual funds. Units of such funds bought on or after 1 April 2023 are always treated as short-term, even if you hold them for ten years.
Their full gain is added to your income and taxed at your slab rate. There is no long-term rate and no indexation benefit for these units at all.
Debt units bought before 1 April 2023 keep the older treatment. Sell within 24 months and the gain is taxed at your slab. Hold beyond 24 months and the rate is 12.5% without indexation.
This is also where a debt fund now differs from a bank deposit. Deposit interest is taxed every year at your slab, and you can check that side with our FD Calculator and Interest Calculator.
Worked Example – Equity Fund LTCG
Suppose you invested ₹5,00,000 in an equity fund on 10 March 2024. You redeem the full holding for ₹8,00,000 on 6 November 2026.
The holding period is over 12 months, so the ₹3,00,000 gain is long-term. After the ₹1.25 lakh exemption, the taxable gain is ₹1,75,000.
Tax at 12.5% comes to ₹21,875. Adding 4% cess of ₹875 gives a total tax of ₹22,750, and you keep ₹7,77,250 after tax.
Try the same numbers in the calculator above. Your own pre-tax return on any fund or SIP can be checked with our XIRR Calculator.
Mutual Fund Tax Calculator (FAQ)
How is tax calculated on a mutual fund redemption?
First subtract your purchase cost from the redemption value to get the capital gain. Then check the holding period and fund type to pick the rate. Equity long-term gains get a ₹1.25 lakh yearly exemption first. Finally add 4% cess on the tax amount.
What is the LTCG tax on mutual funds in FY 2026-27?
For equity funds held over 12 months, long-term gains are taxed at 12.5%, and only on the part above ₹1.25 lakh in a financial year. Debt funds bought before April 2023 pay 12.5% without indexation after 24 months. Newer specified funds get no long-term rate at all.
What is the STCG tax on equity mutual funds?
Equity fund units sold within 12 months of purchase are short-term. The full gain is taxed at a flat 20%, plus 4% cess. There is no exemption limit for short-term gains, unlike the ₹1.25 lakh relief that applies only to long-term equity gains.
How are debt mutual funds taxed after April 2023?
Units of funds with 35% or less in equity, bought on or after 1 April 2023, are always deemed short-term. Their gains are added to your income and taxed at your slab rate, whatever the holding period. Units bought earlier keep the 24-month rule and the 12.5% long-term rate.
Is the ₹1.25 lakh exemption available every year?
Yes. The ₹1.25 lakh exemption on equity long-term gains resets every financial year. It covers your total equity long-term gains of that year across funds and shares, not each redemption separately. Gains you do not use in one year cannot be carried forward to the next year.
Do switches and SWP withdrawals also attract tax?
Yes. A switch is treated as a redemption from the old fund and a fresh purchase in the new one, so gains in the old fund are taxed. Every SWP withdrawal is also a part redemption. Only the gain portion inside each withdrawal is taxed, not the full amount.