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100 FAQ's on Basic Finance

Module Units

How does the taxation on redemption of SIPs work?

In case of SIPs, taxation is done on a pro-rata basis. Every SIP is treated as a fresh investment and capital gains are taxed accordingly. 


For example, today you start a SIP of ₹10,000 in an equity fund. After 12 months, if you decide to redeem your whole corpus, all your gains will come under short term capital gain taxation except your first SIP, the only investment which has completed one year.

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Units 92/101