If you're filing your income tax returns this year, there's an important update on how mutual fund gains are taxed—and it applies whether you're using the old or new tax regime. Long-term gains from equity funds (held over a year) face a 12.5% tax if they exceed ₹1.25 lakh, while short-term gains (held under a year) are taxed at a flat 20%. This could impact your investment strategy, especially if you’re weighing which tax regime to opt for.

Editor’s Note: Taxes on investments can sneak up on you if you're not paying attention. This story breaks down the latest rules so you don’t get caught off guard when filing returns. Whether you’re a seasoned investor or just dabbling in mutual funds, knowing these details could save you money—or at least help you avoid surprises at tax time.