For the purpose of tax-treatment, all funds are classified as equity oriented or debt oriented funds. An equity oriented fund means a fund where investments in equity shares in domestic companies is more than 65% of the assets. If a fund is able to meet this condition, it is treated as equity oriented fund, else as debt oriented fund.

Fund type	Long Term Capital Gains	Short Term Capital Gains	Dividend Distribution Tax (DDT)	Securities Transaction Tax (STT)
Equity Oriented Funds	Nil	11.22% (10% plus surcharge and educational cess)	Nil (for both open and close ended schemes) Dividends are completely tax-free	STT at 0.25% is being levied on the redemption value
ELSS	Nil	Not applicable as the fund has a lock-in period of three years	Nil Dividends are completely tax-free	STT at 0.25% is being levied on the redemption value
Debt Oriented Funds	20% with indexation or 10% without indexation (plus applicable surcharge and educational cess)	Normal slab rate plus surcharge and educational cess. Amounting to 33.66% for investors falling under highest tax bracket	DDT at 14.025 % (12.5% plus surcharge and educational cess) is deducted at source. Therefore, dividends are tax-free in the hands of investors.	N.A.
Fund of Funds	Treated as a debt oriented fund
Capital Protected Funds	Whether the fund qualifies as an equity-oriented fund or a debt-oriented fund would depend upon its investment pattern for a period preceding the maturity period. However, if an investor redeems before the maturity period, decision whether it is equity-oriented or debt-oriented would depend upon its investment pattern for a period preceding redemption.

ELSS	Eligible for tax deduction u/s 80 c for an amount up to Rs. 1 lakh