Ch.8 · Dividend and STT Taxation · hard
What is the 'surcharge and health and education cess' applicable on mutual fund capital gains tax?
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EXPLANATION
The stated capital gains tax rates (12.5% LTCG, 15% STCG) are the basic rates. Applicable surcharge (10% on tax for income ₹50L-₹1Cr, 15% for ₹1Cr-₹2Cr, 25% for ₹2Cr-₹5Cr, 37% above ₹5Cr — but capped at 15% for STCG and LTCG) and Health and Education Cess (4% on tax + surcharge) are added. This increases effective rates — e.g., 12.5% LTCG + 4% cess = 13% for investors below the surcharge threshold.
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