The rules, as they stand
Mutual fund taxation changed twice in quick succession — Finance Act 2023 removed debt indexation, Finance Act 2024 reset the rates, and 2025 refined the gold/international thresholds. The current map:
| Fund category | Short-term | STCG rate | Long-term after | LTCG rate | Exemption |
|---|---|---|---|---|---|
| Equity (>65% Indian equity) | ≤12 months | 20% | 12 months | 12.5% | ₹1.25 L/yr |
| Debt bought on/after 1 Apr 2023 | always slab | slab | — | — | none |
| Debt bought before 1 Apr 2023 | ≤24 months | slab | 24 months | 12.5% | none |
| Listed gold/silver ETF | ≤12 months | slab | 12 months | 12.5% | none |
| International / gold-silver FoF | ≤24 months | slab | 24 months | 12.5% | none |
Equity's definition is mechanical: more than 65% in Indian equities. That is why arbitrage funds — which behave like debt — enjoy equity taxation, and why aggressive hybrids qualify while conservative hybrids do not.
Three details that decide real tax bills
The ₹1.25 lakh exemption is per year, not per fund. All your long-term equity gains in a financial year — funds and listed shares together — share one exemption. Redeeming across March and April uses two years' worth.
The debt cliff is a purchase-date test, not a sale-date test. Debt units bought on 31 March 2023 keep the old 24-month/12.5% route forever; units bought a day later are slab-rated for life. If you hold both, redemption order matters.
Listed beats unlisted for metals. A listed gold ETF turns long-term in 12 months; a gold savings fund (an unlisted FoF holding the same ETF) needs 24. Same underlying asset, different wrapper, a year of difference in tax treatment.
What this calculator does not do
It computes the base capital-gains tax and names the rule it applied. It does not add the 4% cess or surcharge, net off carried-forward losses, split the equity exemption across multiple sales, or handle NRI TDS. For a filing, those matter — take the output to a CA, not to the return form. The full rulebook with worked examples is in our guide: How mutual funds are taxed in India.