What are the tax benefits an individual investor or a corporate investor by investing in a mutual fund?

If the mutual fund is not a ELSS u/s 80ccc, then no tax benifits u/s 80c will be allowed. If it is a ELSS (Equity linked savings scheme) then an Individual or HUF can claim exemption u/s 80c. But the 80c benifit is not applicable for corporate investors.

http://www.rediff.com/getahead/2005/dec/...

Mutual funds & Capital gains:

Non-equity mutual funds:
1. Short Term capital gains: If the units are sold before 12 months, then the gains will be added to gross total income and tax will be charges as per slab rate.

2. Long term capital gains: If the mutual fund units are sold after 12 months, then it is taxed in two different ways as per the choice of the investor. (a). Direct 10% tax on gains or (b) 20% tax after indexation. It is always better to go for 10% direct tax if there is a gain. It it is a loss go for 20% tax indexation.

Equity based mutual fund units:
1. Short term- If sold <12 months- Tax @10% flat
2. Long term- If sold >12 months- Tax= Nil. (tax free)

You can invest in Equity Linked Savings Schemes (ELSS) to get a tax savings under section 80(c) of IT act. Try http://www.ratekhoj.com/fixeddeposit/tax... for a list of ELSS schemes.

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