Tax is one of the largest costs in investing, and one of the most controllable. Nurture Capital is led by Chartered Accountant Saurav Goyal, so capital gains, exit loads and holding periods are planned into your portfolio from the start, not worked out after the damage is done.
We work with investors in Panchkula, Chandigarh, Mohali and Zirakpur, and online across India.
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How mutual funds are taxed in FY 2026-27
| Type of fund | Held for | Tax on gains |
|---|---|---|
| Equity-oriented funds (including arbitrage funds) | 12 months or less | 20% |
| Equity-oriented funds (including arbitrage funds) | More than 12 months | 12.5% on gains above ₹1.25 lakh in a financial year |
| Debt funds bought on or after 1 April 2023 | Any period | Added to income, taxed at your slab rate |
Surcharge and 4% cess apply on top. Hybrid and other funds are taxed according to how much they hold in equity. Budget 2026 made no changes to these rates, and they continue under the Income Tax Act, 2025, which applies from 1 April 2026.
Annual LTCG harvesting
The ₹1.25 lakh exemption on long-term equity gains resets every financial year, and it is lost if you do not use it. Harvesting means selling equity units with long-term gains up to that limit and reinvesting, so the gain is booked tax-free and your purchase cost moves up.
An example: if you book ₹2 lakh of long-term equity gains in a year, the first ₹1.25 lakh is exempt and 12.5% applies to the remaining ₹75,000, which is ₹9,375 before cess. Booking ₹1 lakh of gains in each of two years instead would mean no tax at all on the same ₹2 lakh.
Each family member has their own exemption, so a household can often harvest more. Harvesting needs care with exit loads and timing, which is why we plan it near the end of each financial year.
Tax-efficient switches and exits
Switching from one fund to another is a sale, and it is taxed like one. Before we suggest moving out of any fund you already hold, we work out the tax and exit load first. Sometimes the right answer is to wait until units cross 12 months, to spread the switch across two financial years, or to stop fresh SIPs into a fund while leaving existing units in place.
Capital losses can reduce your tax too. Short-term losses can be set off against both short-term and long-term gains, while long-term losses can only be set off against long-term gains. Unused losses can be carried forward if you file your return on time.
Capital gains statements for your ITR
Every client can download a capital gains statement from their client login, ready to hand to whoever files your income tax return.
Common questions
Is LTCG harvesting legal?
Yes. It uses the exemption the law provides each year. It simply needs to be done correctly.
How are SIP instalments taxed?
Each instalment is a separate purchase with its own holding period, so when you redeem, the oldest units are treated as sold first.
Do ELSS funds still save tax?
ELSS investments qualify for a deduction only under the old tax regime. Under the new regime there is no deduction, though ELSS remains an equity fund with a three-year lock-in.
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Tax information on this page is general and based on rules for FY 2026-27. Your own position depends on your income and circumstances; please confirm with your tax adviser before acting.
Nurture Capital (Saurav Goyal) is an AMFI-registered Mutual Fund Distributor, ARN-344992. We are not a SEBI-registered Investment Adviser. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not indicative of future returns. Illustrations are not a promise of returns.