Question

What is 'tax on mutual fund gains under the new tax regime' introduced in India?

Accepted Answer

Under the new tax regime, capital gains tax rates for equity and debt funds remain the same as the old regime — the difference is that Section 80C deductions (like ELSS) are not available, making ELSS less attractive under the new regime — The new tax regime (lower slab rates but no deductions) does not change the capital gains tax rates — STCG on equity funds remains 15%, LTCG remains 12.5%. However, the Section 80C deduction for ELSS is not available under the new regime, eliminating the key tax benefit of ELSS. Investors under the new regime must evaluate whether equity funds are more tax-efficient than other investments given the loss of 80C benefit.