In this answer, I will explain how you can save up to Rs 10k per year on the Long Term Capital Gain (LTCG) tax for equity mutual fund. As per current tax rules, there is a 10% tax on LTCG over an above the profit of Rs 1 lakh. An investment is qualified as long term if it is more than 1 year old. Please note that the key here is “there is no tax on profit up to 1 lakh”. How can you save tax up to Rs 10k on LTCG? Let’s say you started a SIP of Rs 20k in Kotak Standard Multicap Fund- Direct-Growth on 1st February 2017. (For simplicity, we are considering only 1 mutual fund) Monthly SIP: Rs 20,000 Total Installment: 37 Investment Amount: Rs 20,000*37 = Rs 7,40,000 Units Purchased = Sum of units of each month = 21,239.67 NAV as of 17th Feb 2020 = 40.661 Current Value of Investment = Rs 8,63,626 Profit = Rs 1,23,626 Now, the total profit on Kotak Standard Multicap Fund till date is Rs 1.23 lakh. However, this profit includes investment till 1st Feb 2020. Long Term Capital Gain is applicable