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Jul 31, 2025
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Equity market volatility: Will I lose more on taxation if I switch from equity funds to liquid funds?
Sudhir Kaushik Co-founder & CEO, TaxSpanner: Switching between mutual funds—whether within the same AMC or to a different one—is not tax-free. It is treated as a redemption followed by a fresh investment, thus attracting capital gains tax. If the original investment was in equity-orient ed mutual funds held for over a year, gains are subject to Long-Term Capital Gains (LTCG) tax. LTCG exceeding Rs 1.25 lakh in a financial year is taxed at 12.5% with indexation. To reduce tax impact, consider redeeming in phases over 3-5 years to utilise the annual exemption.
I want to transfer all the mutual funds I have been investing in for the past 10 years to my father. Currently, he is a nominee in most of them. How do I transfer these without any tax implications as the gains for these would be substantial?
Amit Maheshwari Tax Partner, AKM Global: As per Section 47 of the Income-tax Act, 1961, any capital asset transferred as a gift shall not be considered a transfer.
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