New Delhi, May 26 -- Mutual funds taxation in India depends on several factors, including the type of fund and the holding period. Equity and debt mutual funds are taxed differently, and the applicable tax rate can vary depending on whether the gains are classified as short-term or long-term capital gains.

As per income tax rules, equity-oriented mutual funds are taxed at 20% for STCG and 12.5% for LTCG above Rs.1.25 lakh. Meanwhile, debt-oriented mutual funds purchased after April 1, 2023, are taxed at your income tax slab rate, regardless of how long you have held the fund.

As per AMFI (Association of Mutual Funds in India), equity-oriented mutual funds are those that invest at least 65% of their assets in equity shares of domestic co...