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3. Are SIP returns taxable?

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Yes, SIP returns are taxable.

For equity funds, gains are taxed depending on how long you keep the money:

  1. Less than 1 year → 15% tax
  2. More than 1 year → 10% tax (only if overall gain in a year is more than ₹1 lakh).

For debt funds, gains are just added to your income and taxed according to your slab.

So while SIPs are wonderful for building wealth, remember that returns aren’t entirely tax-free.