Income from Mutual funds comes under Income from Capital Gain as per Income Tax Act, 1961. Below is the taxation applicable for Mutual Funds: For Equity Oriented Schemes, Short Term Capital Gain i.e. STCG is when Holding Period is less than 12 Months Long Term Capital Gain i.e. LTCG is when Holding Period is more than 12 Months For an Individual & NRI tax applicable is: LTCG (On Profit exceeding 1 Lakh) = 10% STCG = 15% For Other than Equity Oriented Schemes Short Term Capital Gain i.e. STCG is when Holding Period is less than 36 Months Long Term Capital Gain i.e. LTCG is when Holding Period is more than 36 Months For an Individual & NRI applicable tax rate is : LTCG = 20% (With Indexation) STCG = As per the applicable tax slab In addition to this, the dividend declared is also taxable which is paid by the Mutual Fund Scheme. The details of the same are: For an Individual & NRI dividend is taxed at: Equity Oriented Schemes = 10% + 12% Surcharge + 4% Cess = 11.648% Debt Schemes = 25% + 12% Surcharge + 4% Cess = 29.12%