ЁЯТ╕ Taxation in Investments (India)
ЁЯУК LTCG, STCG & Dividend Tax – At a Glance
| Asset Type | Holding Period | Short-Term Capital Gain (STCG) | Long-Term Capital Gain (LTCG) | Dividend Tax |
|---|---|---|---|---|
| Equity Shares / Equity Mutual Funds | < 12 months = STCG > 12 months = LTCG |
15% flat | 10% above ₹1 lakh (no indexation) | Taxable as per income slab |
| Debt Mutual Funds | < 36 months = STCG > 36 months = LTCG |
As per income tax slab | Removed from FY24-25 — Now taxed as per slab | Taxable as per income slab |
| Gold (Physical, ETFs, SGBs) | < 36 months = STCG > 36 months = LTCG |
As per income tax slab | 20% with indexation | Not applicable |
Note: SGB interest (2.5% p.a.) is taxable; redemption after 8 years is LTCG exempt.
ЁЯТб Popular Tax-Saving Investment Options (Under 80C)
- ЁЯУМ ELSS Mutual Funds – Lock-in 3 years
- ЁЯУМ Public Provident Fund (PPF) – 15-year term, tax-free interest
- ЁЯУМ National Pension System (NPS) – Extra ₹50,000 deduction (80CCD(1B))
- ЁЯУМ Life Insurance Premiums, EPF contributions
- ЁЯУМ Fixed Deposits (Tax-saving 5 year)
Total deduction limit under 80C: ₹1.5 lakh per financial year
❌ Common Tax Mistakes by Investors
- ❗ Not accounting for capital gains in ITR
- ❗ Confusing ELSS with regular mutual funds
- ❗ Redeeming before holding period – leads to STCG
- ❗ Not using 80C limit fully (wasting tax savings)
- ❗ Ignoring tax on dividends (since FY21, it’s taxable to receiver)
Always download your Capital Gains Statement from broker platforms before ITR filing.
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