Glossary· Tax
What is Equity-oriented fund?
A fund holding at least 65% Indian equity — the test that decides its tax treatment.
It is a tax definition, not a marketing one. Arbitrage and aggressive-hybrid funds are equity-oriented; fund-of-funds, gold, international and balanced-hybrid schemes are not, and are taxed under the separate non-equity rules.
For the formula and the constants behind this figure, see Methodology.
Guides that use Equity-oriented fund
10 guides put this term to work.
- Mutual funds vs fixed deposits: which risk are you willing to see?An FD hides its risk in purchasing power; a fund puts its risk on a screen daily. Where each genuinely wins, and why most households need both.
- Equity funds demystified: large cap, mid cap, small cap and the SEBI rulebookSince 2017 every open-ended scheme sits in one defined box with a binding rule about what it must hold. What the boxes mean, and why comparing across them tells you almost nothing.
- Hybrid and balanced advantage funds: the ultimate stress-free ride?Hybrids live at the intersection of asset allocation and the 65% tax line. How a BAF really works, what internal rebalancing is worth, and why net equity is the only number that matters.
- ELSS: save tax while building wealth — if you are on the right regimeSection 80C exists only under the old regime, which turns “is ELSS worth it?” into a question about your tax regime rather than about the fund.
- International funds: diversifying beyond the economy you already earn inYour job, salary and property are already a bet on India. The case for global exposure, the RBI limits that close schemes, and the non-equity tax treatment that surprises people.
- Fund of funds: what happens when a mutual fund buys mutual funds?Two expense layers and, usually, non-equity taxation with a 24-month clock. Where the wrapper genuinely earns its place, and where you are paying twice for convenience.
- The art of asset allocation: it decides more than fund selection ever willHow much sits in equity matters more than which equity fund. Setting the split, rebalancing on bands rather than hunches, and doing it without handing back the gain in tax.
- Mutual fund taxation decoded: short-term vs long-term capital gainsEquity, debt, hybrid and ELSS are taxed under different rules, and the rules changed twice in three years. What applies now, and to which of your units.
- Building a core-satellite portfolio with international exposureMost Indian portfolios are a single-country bet held across salary, property and investments at once. How to size the sleeve, and the two Indian frictions to plan around.
- Currency risk: the second bet inside every international fundA five-point move in the exchange rate can swing your return by ten points. Why unhedged is usually right, and why hedging costs an Indian investor.
More on tax
Indian capital-gains treatment as it applies to mutual fund redemptions. Rates are FY 2025-26 and exclude surcharge, cess and STT.