Ask The Tax Expert

Tax Exemption on Short-Term Capital Gains

Question: Hi, I have invested in mutual funds for 3 months. Then I got my money back. With this can I get any tax exemption. Or do I need to invest for whole financial year. Kindly provide the details.


Answer: Dear Mr Ramesh, gains arising from investment in equity mutual funds, for a period of less than 12 months is considered as short-term capital gains. Tax would be 15% flat in such cases. If held for more than 12 months, it is tax exempt. In case of debt funds, for short term capital gains, amount of gains needs to be included in your taxable income while filing your return of income. If held for more than 12 months, tax would be 20% with indexation or 10% without indexation, whichever is lesser.
In order to get tax deduction for investment in ELSS schemes, you need to stay invested in the scheme for minimum 3 years period. Kindly click here to know more about ELSS mutual fund schemes.


Warm Regards,


Published Dec 15 2010




danny said:

i had purchased a flat in the year 2007 (cost Rs.15 lacs)  & sold it in 2010 (Rs.29 lacs) & with that amount i again purchased a flat in the same year 2010 (Rs.31 lacs) & the same i would like to sell now after 1 year ie , 2011 (Rs.37 lacs) , what will be my implication on capital gain tax? how can i get the exemption on short term capital gain tax?

September 20, 2011 6:42 AM

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