Equity MF Gains Over ₹1.25L: Are You Filing Right?

If you sold mutual fund units in FY 2024-25, you must report those capital gains in your ITR for AY 2026-27. The tax rules changed last year — and filing them wrong can mean notices, penalties, or missed refunds.

Here's what happened: From FY 2024-25, long-term capital gains on equity MFs above ₹1.25 lakh are taxed at 12.5% — up from the earlier ₹1 lakh exemption limit at 10%.. Short-term capital gains on equity MFs (held under 12 months) are now taxed at 20%, revised upward from the earlier 15% flat rate.. Debt mutual fund gains — regardless of holding period — are taxed as per your income tax slab, with no indexation benefit for units bought after April 1, 2023..

What you should do: Download your Capital Gains Statement from your broker, Zerodha Console, Groww, or CAMS/KFintech before filing — don't rely on memory or app summaries.. Check your ITR form carefully: equity MF gains go under Schedule 112A, while debt MF gains (post-April 2023 purchases) go under 'Income from Other Sources' or Schedule CG as applicable.. If you redeemed both equity and debt MFs in FY 2024-25, use a tax tool or consult a CA — mixing up the schedules is one of the most common ITR filing errors this season..

You can set off short-term capital losses from one MF against short-term or long-term gains from another — reducing your tax outgo significantly. Don't leave this on the table.