How are Equity Mutual Funds taxed in India?

Equity funds held under 12 months attract Short-Term Capital Gains (STCG) tax at 20%. Held over 12 months, Long-Term Capital Gains (LTCG) exceeding ₹1.25 lakh per year are taxed at 12.5% without indexation. LTCG below the threshold is completely tax-free, making long-term equity investing highly tax-efficient.