Will the SIP maturity amount be fully taxable

I have a doubt that imagine I started SIP in 2000 and ended on 2010 the Investment made by me was 10 Lakhs and the maturity amount was 30 Lakhs. So the profit was 20 lakh + 10 lakh capital. There will be no tax since I held each instalment over an year. Am I right. Now my question is - My Regular income slab is upto 4 Lakh per annum. So now my income will be arise from 4 lakh + 30 lakh = 34 lakh. While making return File do I need to pay TAX on for 4 lakh or for 34 lakh confused. Please help me?

Aug 18, 2017 by Vishal Jadhav, Karad | Mutual Fund

If you are investing through SIPs in equity and balanced mutual fund schemes, then all the gains made after one year will be treated as long term capital gains and that will be completely tax free.

Therefore, as you have mentioned, if you get a profit of 20 Lakhs by investing Rs 10 Lakhs, the entire redemption amount of Rs 30 Lakhs will be tax free (assuming your SIPs were in either equity funds or balanced funds). Therefore, you need not pay any taxes.

However, if your SIPs were in debts funds or hybrid funds (MIPs) then the profits will be tax @20% after indexation. You will have to pay taxes@20% after computing the net profit post indexation. Please note that in case of debt funds or hybrid funds (MIPs), the long term is defined as 3 years.

Hope we could help you with our answer. Thanks for writing to Advisorkhoj.

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