When you make profits from your investments, the net gain is known as capital gains. Capital gains are taxed at different rates for equity and non equity schemes. 

Capital gains earned when you redeem your mutual fund units within 12 months of investment is known as short term capital gain. A profit earned when you hold your investment for more than 12 months is called long term capital gains.

For equity funds, short-term capital gains are taxed at 15%.  Long term capital gain (LTCG) up to Rs 1 lakh is exempt from tax. Any profit over Rs 1 lakh per annum is taxable at the rate of 10%, with no indexation benefit.

Capital gains from debt funds are added to income and taxed at applicable income tax slab rates.