LTCG, or long-term capital gain, is the profit on fund units held longer than a set period, which for equity funds is 12 months.
A capital gain is the difference between what you paid for units and what you received when you sold or switched them. Whether it is long-term depends on how long you held each unit and on the type of fund.
For equity-oriented funds, those with at least 65% in Indian shares, including ELSS and arbitrage funds:
Debt funds bought on or after 1 April 2023 have no long-term category. All their gains are taxed at your slab rate.
For example, you invested ₹2 lakh in an equity fund and redeem it two years later for ₹3.5 lakh. The gain is ₹1.5 lakh. With no other long-term equity gains that year, ₹1.25 lakh is tax-free and ₹25,000 is taxed at 12.5%, or ₹3,125 before cess.
Other funds, such as gold and international funds, have their own holding periods, covered in mutual fund tax.
The tax on a mutual fund gain depends on what the fund holds and how long you held the units. The 2026-27 rates in one table, with what each group of funds covers.
Long-term equity gains up to ₹1.25 lakh a financial year are tax-free. Booking them each year by redeeming and buying back raises your cost. How it works and what to check.
Each fund page has its returns, risk, costs, managers and everything it holds.