Equity Fund
A mutual fund investing at least 65% of its assets in Indian equity and equity-related instruments.
How it is identified
Test: minimum 65% allocation to domestic equity, which also determines the scheme's tax treatment
Unit
qualitative
In depth
The 65% threshold is a tax rule as much as an investment one: schemes meeting it are taxed as equity, with a lower long-term rate and a twelve-month qualifying period, while those falling short are not. This is why some hybrid and arbitrage funds are constructed to sit just above the line. Within the category SEBI's scheme categorisation defines large-cap, mid-cap, small-cap, flexi-cap and other sub-types with mandated allocations, so a fund's name now constrains what it can hold. Equity funds carry full market risk and are appropriate only for horizons long enough to absorb a deep decline.
Worked example
An equity fund's gains above ₹1.25 lakh a year are taxed at the long-term equity rate if held beyond twelve months. A fund holding 60% equity misses the threshold and its gains are taxed under the other-than-equity rules instead.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Equity Fund” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.