General information only. Not investment, tax or legal advice. Naming a fund category is not a recommendation to buy, hold or sell anything. Prem Tax and Accounting Corp is a CPA firm, not a law firm. Rules differ by country and change often: confirm with the official source or a qualified adviser before you act. Read the full notice. Book a 10-minute call.

Mutual Funds in India

Every SEBI fund category, with its tax class and its treatment abroad

SEBI's 2026 tables list 40 categories in five groups. Our four tables show each category's rule, its usual India tax class for FY 2026-27 and how the U.S., Canada, the UK and the EU treat it.

Prepared by Prem Tax and Accounting Corp. Last checked against official sources on November 5, 2026.

SEBI's Master Circular of 20 March 2026 numbers 40 categories: 13 equity, 17 debt, 7 hybrid, 1 Life Cycle and 2 other. SEBI prints no total; 40 is our count. The Forty-Row Finder: find the category, read its rule, follow the tax and country columns. Old names are in brackets, and SEBI gives no typical risk level for a category.

Tax class (FY 2026-27, details): EOF, equity-oriented (65% or more in listed Indian shares): 20% short term, 12.5% long term over 12 months, above Rs 1.25 lakh a year. SMF, specified (over 65% in debt and money market): slab rate, never long term for units bought from 1 April 2023 (older units as Other). Other: slab rate short term, 12.5% after 24 months (12 if listed). Holdings decide, not names.
Abroad: PFIC is the usual U.S. view. T1135 means no PFIC regime in Canada, but Form T1135 applies above CAD 100,000 of total foreign cost. UK list: gains taxed as income unless that class was on HMRC's list throughout. UK bond: likely a bond fund, and none of these is on the list. DE 30% and DE 15%: Germany's partial exemptions if the equity quota is met; DE proof: only on yearly proof; DE none: no exemption; DE rate shifts: a rate change counts as a deemed sale.

Large, mid, small, multi, flexi and other equity funds in India

Large, mid, small, multi, flexi, focused, value, contra and dividend yield funds: SEBI rules, India tax for FY 2026-27 and what holders abroad report.

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ELSS, sector, theme and Life Cycle funds explained

ELSS tax-saver, sectoral, thematic and Life Cycle funds in India: SEBI rules, lock-in, glide path, India tax for FY 2026-27 and what holders abroad report.

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All 17 debt fund categories in India, from overnight to gilt

All 17 SEBI debt fund categories, from overnight to long term, gilt and the debt sectoral fund: rules, India tax for FY 2026-27 and treatment abroad.

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Hybrid funds in India: seven categories that mix shares and bonds

All 7 SEBI hybrid fund categories, from conservative and balanced to arbitrage and equity savings: rules, India tax class for FY 2026-27 and treatment abroad.

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Index funds, ETFs and funds of funds: what sits inside, and how each is taxed

How SEBI treats index funds, ETFs, gold and silver ETFs and fund of funds, with overseas limits, India tax for FY 2026-27 and the view abroad.

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Specialized Investment Funds and MF Lite: what they are and what is open

What SEBI's Specialized Investment Funds (SIF) and MF Lite are: the Rs 10 lakh minimum, seven strategies, NRI access and why tax treatment is not settled.

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Equity funds (13 categories)

Category	SEBI rule	India tax class	U.S.	Canada	UK and EU
Multi Cap	75% equity, 25% each cap size	EOF	PFIC	T1135	UK list; DE 30%
Large Cap	80% in large caps	EOF	PFIC	T1135	UK list; DE 30%
Large & Mid Cap	35% large, 35% mid	EOF	PFIC	T1135	UK list; DE 30%
Mid Cap	65% in mid caps	EOF	PFIC	T1135	UK list; DE 30%
Small Cap	65% in small caps	EOF	PFIC	T1135	UK list; DE 30%
Flexi Cap	65% equity, any size	EOF	PFIC	T1135	UK list; DE 30%
Dividend Yield	80% equity, dividend payers	EOF	PFIC	T1135	UK list; DE 30%
Value	80% equity, value style	EOF	PFIC	T1135	UK list; DE 30%
Contra	80% equity, contrarian style	EOF	PFIC	T1135	UK list; DE 30%
Focused	80% equity, max 30 stocks	EOF	PFIC	T1135	UK list; DE 30%
Sectoral	80% in one sector	EOF usually	PFIC	T1135	UK list; DE 30%
Thematic	80% in one theme	EOF usually	PFIC	T1135	UK list; DE 30%
ELSS (Tax Saver)	80% equity; lock-in is an ELSS 2005 rule	EOF	PFIC	T1135	UK list; DE 30%

Debt funds (17 categories)

Category	SEBI rule	India tax class	U.S.	Canada	UK and EU
Overnight	1-day securities	SMF	PFIC	T1135	UK bond; DE none
Liquid	up to 91 days	SMF	PFIC	T1135	UK bond; DE none
Ultra Short Term (Ultra Short Duration)	duration 3 to 6 months	SMF	PFIC	T1135	UK bond; DE none
Ultra Short to Short Term (Low Duration)	duration 6 to 12 months	SMF	PFIC	T1135	UK bond; DE none
Money Market	instruments up to 1 year	SMF	PFIC	T1135	UK bond; DE none
Short Term (Short Duration)	duration 1 to 3 years	SMF	PFIC	T1135	UK bond; DE none
Medium Term (Medium Duration)	duration 3 to 4 years	SMF	PFIC	T1135	UK bond; DE none
Medium to Long Term (Medium to Long Duration)	duration 4 to 7 years	SMF	PFIC	T1135	UK bond; DE none
Long Term (Long Duration)	duration over 7 years	SMF	PFIC	T1135	UK bond; DE none
Dynamic Term (Dynamic Bond)	any duration	SMF	PFIC	T1135	UK bond; DE none
Corporate Bond	80% in AA+ and above	SMF	PFIC	T1135	UK bond; DE none
Credit Risk	65% in AA and below	SMF	PFIC	T1135	UK bond; DE none
Banking and PSU Debt (Banking and PSU)	80% banks, PSUs, municipal	SMF	PFIC	T1135	UK bond; DE none
Gilt	80% in government securities	SMF	PFIC	T1135	UK bond; DE none
10 year Constant Maturity Gilt (Gilt, 10 year constant duration)	80% G-secs, duration 10 years	SMF	PFIC	T1135	UK bond; DE none
Floating Interest Rates (Floater)	65% floating-rate	SMF	PFIC	T1135	UK bond; DE none
Sectoral, debt	80% AA+ debt, one sector	SMF	PFIC	T1135	UK bond; DE none

Hybrid funds (7) and Life Cycle Funds (1)

Category	SEBI rule	India tax class	U.S.	Canada	UK and EU
Conservative Hybrid	equity 10-25%, debt 75-90%	SMF usually	PFIC	T1135	UK bond; DE none
Balanced Hybrid	equity 40-60%, debt 40-60%	Other usually	PFIC	T1135	UK list; DE 15%
Aggressive Hybrid	equity 65-80%, debt 20-35%	EOF usually	PFIC	T1135	UK list; DE 30%
Balanced Advantage (Dynamic Asset Allocation)	dynamic, no fixed band	Varies	PFIC	T1135	UK list; DE proof
Multi Asset Allocation	3 or more asset classes, 10% each	Varies, often Other	PFIC	T1135	UK list; DE proof
Arbitrage	65% equity, arbitrage style	EOF in practice, not settled	PFIC	T1135	UK list; DE unsettled
Equity Savings	65% equity, net equity 15-40%	EOF in practice, not settled	PFIC	T1135	UK list; DE unsettled
Life Cycle Fund	target date 5 to 30 years, glide path	Varies by year	PFIC	T1135	UK list; DE rate shifts

Other schemes (2)

Category	SEBI rule	India tax class	U.S.	Canada	UK and EU
Index Funds and ETFs	95% in the index's securities	EOF, SMF or Other by index	PFIC	T1135	Follows what it tracks
Fund of Funds	95% in underlying funds	SMF, EOF or Other	PFIC	T1135	UK list; DE unsettled

France, the Netherlands, Switzerland and EU retail rules do not vary by category in our sources. Life Cycle Funds replaced the Retirement and Children's category (Life Cycle page). SIFs and MF Lite are products, not categories. Re-check each April.

Official sources

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Please read: general information only

This page gives general information and education about Indian mutual funds and about the tax and reporting rules that may apply to people who hold them. It is not investment, legal, tax, accounting or other professional advice, and it is not a substitute for advice from a qualified adviser, attorney or CPA who knows your facts. Reading it does not create a CPA-client or any other professional relationship with Prem Tax and Accounting Corp. Prem Tax and Accounting Corp is a CPA firm, not a law firm. It does not recommend, rate, sell or manage any mutual fund or other investment, and naming a fund category or product here is not a recommendation to buy, hold or sell it.

Tax and reporting rules differ by country and by person, and they change often: thresholds, rates, forms and deadlines are revised, and agencies, courts and fund companies change how they apply them. We checked the figures against the official sources named on the page on the date shown (last reviewed November 5, 2026), but we do not promise that this page is complete, current or free of errors, and we do not update it the moment a rule changes. Where the rules are unsettled we say so. Fund companies set their own policies on who may invest, and those can change without notice. Past performance does not predict future results, and investments can lose value. Examples are invented and for illustration only.

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Questions about how your Indian funds are reported on a U.S. return? Keshav Agrawal is a U.S. CPA and a Chartered Accountant (CA) from India. We prepare the U.S. side (for example Form 8621, FBAR and Form 8938) and can work alongside your adviser in India, Canada or Europe. We do not sell, rate or recommend any investment. Book a 10-minute call or send us a message.

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