If you invest in mutual funds, it is important to know the tax implications on your investments. Mutual funds are taxed according to the holding period or the investment duration. There are two types of holding period—long-term and short-term. Different types of mutual funds have different measures for what constitutes a short-term holding period and long-term holding period.
Short-term holding period Equity funds held for less than 12 months are termed as short-term investments. On the other hand, for debt funds to short-term investments, the holding period must be less than three years.
Long-term holding period Equity funds held for a period of more than or equal to 12 months are considered as long-term investments. Contrary to that, debt
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