ARN - 75896
Date of Initial Registration: 06 August 2009
Validity of Registration: 05 August 2029
ARN - 75896
Date of Initial Registration: 10 January 2026
Validity of Registration: 18 August 2028
A mutual fund pools money from many investors and invests it in shares, bonds or other securities according to the objective of the scheme. These investments are professionally managed by an Asset Management Company (AMC).
When you invest in a mutual fund, you receive units. The value of each unit is called the Net Asset Value (NAV).
Suppose you invest ₹10,000 in a mutual fund when its NAV is ₹20. You will receive 500 units.
If the NAV later becomes ₹22, your 500 units will be worth ₹11,000, resulting in a gain of ₹1,000 or 10%.
If the NAV falls to ₹18, the value will be ₹9,000, resulting in a loss of ₹1,000 or 10%.
Thus, NAV is simply the value of one unit of the mutual fund. A scheme with an NAV of ₹100 is not necessarily better or more expensive than a scheme with an NAV of ₹20. What matters is the percentage return and suitability of the scheme.
Taxation depends upon the type of mutual fund, period of holding and applicable tax provisions.
| Type of Mutual Fund | Holding Period | Tax Treatment |
|---|---|---|
| Equity-Oriented Mutual Fund | Up to 12 months | Short-Term Capital Gain (STCG) – 20% |
| Equity-Oriented Mutual Fund | More than 12 months | Long-Term Capital Gain (LTCG) – 12.5% on aggregate eligible LTCG exceeding ₹1.25 lakh in a financial year. |
| Specified Debt Mutual Funds covered by Section 50AA | Irrespective of holding period | Gain treated as Short-Term Capital Gain and taxable at the investor's applicable income-tax rate. |
| Other Mutual Funds not covered by the above categories | Depending upon the applicable holding-period provisions | Taxable according to the applicable capital-gains provisions. |
Applicable surcharge and Health & Education Cess are additional, wherever applicable.
For equity-oriented funds, the current 20% STCG and 12.5% LTCG rates reflect the rates applicable to transfers on or after 23 July 2024.
From 1 April 2026, the definition of a “Specified Mutual Fund” under Section 50AA broadly covers a mutual fund investing more than 65% in debt and money-market instruments, as well as certain funds investing in such funds. Gains covered by Section 50AA are treated as short-term capital gains and taxed at the applicable rate.
Tax laws may change from time to time, and the actual tax liability may vary depending upon the investor's circumstances. Investors should therefore verify the tax provisions applicable at the time of redemption or transfer.
Mutual funds provide benefits such as professional management, diversification, liquidity and access to different asset classes. However, mutual fund investments are subject to market and other risks, and returns are generally neither fixed nor guaranteed.
Investments can be made through a lump sum or Systematic Investment Plan (SIP). Investors should consider the scheme's investment objective, risk level, investment horizon, liquidity, costs and taxation before investing.
Tax treatment may vary depending on the type of investment, applicable law and the investor's individual circumstances. Investors should verify the applicable tax provisions at the time of investment, redemption or transfer.