MFs and Taxation

Can anyone tell me - what are the tax benefits available while investing and selling units in MFs. I know the tax benefits of ELSS but apart from that are there any tax benefits on any regular MFs. Also are the returns on ELSS taxable? As far as I know, they are not, under section 10(10D).

For ELSS there is no tax when you redeem as it is long term gain. But for other Mutual funds there's STT (Security transaction Tax).

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Originally Posted by Sharma

Can anyone tell me - what are the tax benefits available while investing and selling units in MFs. I know the tax benefits of ELSS but apart from that are there any tax benefits on any regular MFs. Also are the returns on ELSS taxable? As far as I know, they are not, under section 10(10D).

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One more point - If you hold your equity mutul fund units for 365 days, it will be treated as long term capital gain which is tax free & if you withdraw before 365 days you have to pay short term capital gains which is 10% of your gain.

Taxman - What will happens if I don't hold ELSS for the long term? What are the short term taxation for ELSS?

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Originally Posted by Sharma

Taxman - What will happens if I don't hold ELSS for the long term? What are the short term taxation for ELSS?

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ELSS you have to hold for minimum three years, you cannot redeem before that. There is three years lockin period in it.