Understand the pass-through taxation framework of Specialized Investment Funds (SIFs) and how it impacts your returns.
| Resident Investors (Individuals) | Domestic Companies / Partnership Firms | SIF / Mutual Fund | |
|---|---|---|---|
| Tax on Dividend | As per applicable slab rates | As per applicable slab rates | NIL |
| Tax on Capital Gain — Equity Oriented Funds | |||
| Long Term | 12.5% (on gains > ₹1,25,000) | 12.5% | NIL |
| Short Term | 20% | 20% | NIL |
| Tax on Capital Gain — Hybrid Funds | |||
| Long Term | 12.5% | 12.5% | NIL |
| Short Term | Applicable slab rates | Applicable slab rates | NIL |
| Tax on Capital Gain — Debt Funds | |||
| Long Term | Deemed short term | Deemed short term | NIL |
| Short Term | Applicable slab rates | Applicable slab rates | NIL |
SIFs enjoy pass-through taxation, meaning income is taxed directly in the hands of investors — similar to mutual funds — and not at the fund level.
Equity SIFs are taxed like equity mutual funds, while Debt & Hybrid SIFs follow the investor’s slab rate or portfolio mix.
SIFs comply with SEBI’s investment vehicle norms. Always consider your personal tax situation and seek advice from a qualified professional before investing.
Disclaimer: For taxation-related matters, please consult your tax advisor. For detailed product information, refer to the respective AMC or Fund House website.