The type of taxes and their rates  applicable on the profits earned on investments in  mutual funds depends on the type of mutual fund scheme.

An equity-oriented mutual fund scheme is one where at least 65% of the assets are invested in equity shares of companies.

A debt-oriented mutual fund scheme is one which invests primarily in debt and money market instruments and the equity exposure is less than 65 %. Examples of debt-oriented mutual funds are money market mutual funds, liquid schemes, bond funds and income funds.

Continue reading →