What is Short Term Capital Gains Tax on Mutual Funds?

 

Short-term capital gains tax on mutual funds is a tax imposed on the profits earned from the sale of mutual fund units held for a short duration, typically one year or less. In most countries, including the United States, short-term capital gains are taxed at a higher rate compared to long-term gains. The exact tax rate varies depending on the individual's income tax bracket and the specific tax laws of the country or region. Short-term capital gains tax is calculated by subtracting the cost basis (the original purchase price plus any associated fees or expenses) from the selling price of the mutual fund units, and then applying the applicable tax rate to the resulting profit.