For Equity ETFs:
- The tax on redemption of equity ETFs is calculated based on the holding period.
- Long-term capital gain occurs when the holding period exceeds a year.
- If the gain is less than Rs.1 lakh, it is exempt.
- Long-term capital gains of more than Rs.1 lakh are taxed at 10% without indexation benefits.
- However, if the holding period is less than 12 months, the short-term capital gain is subject to a 15% tax liability.
For Debt, Commodity & International ETFs:
For long term capital gains, the tax structure is at 20% along with indexation benefits.
For short-term capital gains, the amount will be added to the investor's annual income and taxed as per the applicable income tax slab rates.