Capital gains tax liability arises only you sell units of mutual funds. Therefore investments gains in bond funds are tax. However, retail investors are taking keen interest in bond funds. And you can see how to calculate tax. But many individuals are invested in gilt funds. In addition, in 2014 and 2015 interest rates are expecting downward. Hence, many booking profit as rates are bottom. You can read which capital gains are taxable.
How to calculate tax payable on your capital gains
If you have made capital gains on any financial transactions. Such as shares, property etc. And you must pay tax on these gains. However, for beginners on capital gains arises tax only when you sell mutual fund units. Moreover, even for switching from one scheme to another tax is considered.
However, tax rate on capital gains depends on time you hold investment. But you need to hold for at least three years. Further, your gains will be taxed as long term capital gains at rate of 20.6 percent. Probably, if your holding period of investment is less than three years. And your gains will be taxed at marginal rate.
Long term and short term capital gains (STCG) are taxed at different rates as per income tax laws. Further, in specific cases these gains are taxed at special rates. Moreover, Capital gains tax (CGT) is charge on gains in financial year. But tax is pay in financial year from transfer or sale amount are actual receive by you.
Now look at calculation capital gain tax for long term. Hence, see tax on equity mutual funds. For more details see what Bond Fund Taxation is and how it calculates.
Investment year: 2014-2015
Cost index inflation for 2014-2015: 939
Invested amount: Rs 1 Lakh
Redemption of year: 2016-2017
Cost inflation index for 2016-2017:1125
Sales proceeds: Rs 1.5 Lakh
Furthermore, purpose of calculation you shall first arrive at indexed cost of your investment. Therefore it can be arrived by using below formula:
(Investment amount*Cost inflation index for sale year)/ Cost inflation index for purchase of year)
But in above case (100000*1125)/939= 119808 Rs
And now calculate capital gains index. Therefore you shall deduct index purchase cost from sale cost.
Capital Gain amount: Rs 150000-119808= 30192
20 percent rate of tax will be charge on this capital gain
However, tax at 20% works (30192*20 percent) = 6039
In FY 2017-18 if you have sold your investments. Moreover, you have to wait till government comes with index number for current FY. Hence, you can see cost inflation index. Probably, you have to pay your tax well before tax date. However, dividend distribution tax of 28.75 percent for dividends. And, this is deduct by mutual fund and paid on your behalf to exchequer.
Finally, check capital gains calculations. However, see on SIP investments capital gains calculation. And you can also see long term capital gain tax on debt mutual fund. For better understand see tax on dividend from debt mutual fund. Hence, check debt fund tax calculator.