Do I have to pay capital gains tax if I switch between schemes of same mutual fund?

Will I have to pay capital gains tax if I switch between mutual funds of the same fund house?

Archit Gupta, CEO, ClearTax replies, "The switching of schemes would be considered as a redemption or sale of units of one scheme and purchase of units of the other scheme. Hence, the investor will have to calculate capital gains or losses on the units of the scheme redeemed. In case the investment in a scheme is redeemed within one year from the date of investment, the gains or losses would be short term and taxed at 15 per cent. If the investment is redeemed after one year of making the investment, the gains or losses would be long term and taxed at 10 per cent without indexation, provided the gains are more than Rs 1 lakh."

Both my children suffer from autism, assessed as more than 80% disability. How much deduction can I avail of under Section 80DD?


Amit Maheshwari, Partner, Ashok Maheshwary and Associates replies, "According to Section 80DD of the Income-Tax Act, when a person incurs expenditure on the treatment of a dependant with severe disability, he can claim a deduction of Rs 1.25 lakh in the year in which the expenditure is incurred. Autism is covered under this section. Further, the provision makes reference to ‘a dependent’ giving the impression that the deduction shall be allowed for one dependant only. Hence, in our view, you will not be able to claim deduction for two dependants under the provisions of this section."