Question

Which of the following is the CORRECT tax treatment for each SIP instalment when calculating capital gains?

Accepted Answer

Each instalment is treated as a separate purchase; FIFO method applies for redemptions — Each SIP instalment is an independent purchase with its own acquisition date and cost. On redemption, FIFO (First In, First Out) applies — earliest purchased units are redeemed first, determining the holding period and gain for each lot.