STCG, or short-term capital gain, is the profit on fund units sold within the short-term holding period, taxed at 20% for equity funds.
A capital gain is short-term when the units sold were held for less than the long-term period for that type of fund.
For equity-oriented funds, those with at least 65% in Indian shares:
Debt funds bought on or after 1 April 2023 are taxed at your income tax slab rate on all gains, however long you hold them.
For example, you invest ₹1 lakh in an equity fund and redeem it eight months later for ₹1.15 lakh. The ₹15,000 gain is short-term, and the tax is ₹3,000 before cess.
Each purchase has its own holding period. Units are sold oldest first, so if you redeem part of a SIP holding, the earliest instalments go first and may be long-term while later ones are short-term.
A switch from one scheme to another is also a sale and can create a short-term gain. How mutual fund gains are taxed works through the cases, and LTCG covers the long-term rules.
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.