Mutual Fund Investors & Section 87A: How the New Tax Regime Impacts Your Gains

The latest tax reforms for FY 2025-26 bring significant changes for mutual fund investors, particularly in how capital gains are treated under Section 87A. With the Central Board of Direct Taxes (CBDT) clarifying that short-term and long-term capital gains under Sections 111A and 112 will be excluded from rebate calculations, investors must reassess their tax liabilities. This article breaks down the implications of the new tax regime, explaining how the revised rebate threshold of ₹12 lakh and the increased rebate limit of ₹60,000 affect taxpayers. Whether you’re a seasoned investor or new to mutual funds, understanding these changes is crucial for optimizing your tax planning. Read on to explore expert insights and practical examples that simplify the complexities of the updated tax rules.

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