arrow_back Market Intelligence SWP taxation explained: Why every withdrawal from a mutual fund can have a different tax liability
results · Livemint · 01 Jul 2026

SWP taxation explained: Why every withdrawal from a mutual fund can have a different tax liability

For tax purposes, each SWP payout is considered a partial redemption of mutual fund units. This means every withdrawal comprises two components: the return of the original investment (principal) and capital gains. Tax is levied only on the capital gains component of each withdrawal.

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