How to Invest in Mutual Funds for Minors?
Last updated August 22, 2026
This IPO News guide/article covers “How to Invest in Mutual Funds for Minors?”. The page is organized around minimum age to invest in mutual funds in india, process to invest in mutual funds in the minor name, 1. invest directly with mutual fund companies, 2. invest through stock broker, documents required for minor investment in mutual funds. The source record was published on Friday, May 17, 2024. IPO News presents the structured facts and tables in its own layout and wording.
Topics Covered
- Minimum age to invest in mutual funds in India
- Process to invest in Mutual Funds in the minor name
- 1. Invest directly with Mutual Fund Companies
- 2. Invest through Stock Broker
- Documents required for Minor Investment in Mutual funds
- Taxation on Minor Mutual Fund Investment
- Pros of Investing in Mutual Funds for Minor
- Cons of Mutual Fund Investment in the name of Minor
- When a minor attains the age of 18 years
- Zerodha Trade@20
- Compare Stock Brokers Side-by-Side
Key Facts
- India's trusted financial research platform since 2015. Live IPO GMP, subscription data, allotment status, Rights Issues, NCDs and unbiased stock broker reviews.
- Once a child turns 18+, the child will be responsible for paying capital gain tax. Capital gains received on mutual fund investments are taxed as short-term capital gains and long-term capital gains.
- Note: The new tax rates will be applicable from 1st April 2025.
- Currently, equity mutual funds are taxed at 15% STCG and 10% LTCG for profits above Rs 1 lakh.
- Short-term capital gains on debt mutual funds are currently taxed at slab rate while long-term capital gain is taxed at 20% with indexation benefits.
- Once the minor turns 18+, he/she is treated as an independent entity and must pay tax on capital gains.
- Want to start your investment journey? Join India's Pioneer Discount Broker – ZERODHA – Free Delivery Trade, Maximum Rs 20 for F&O and Intraday, Free Direct Mutual Fund investment.
Data Tables
| Mutual fund Type | Short-term capital gain tax | Long-term capital gain tax |
|---|---|---|
| Equity Mutual Funds or Equity-oriented hybrid schemes | If you have sold your investment within 1 year, then you have to pay 20% short-term capital gain tax. | If you sell equity mutual funds after a year and receive gain of upto Rs 1.25 lakh then the entire long-term capital gain upto Rs 1,25,000 will be tax-free. However, profit above the threshold limit will be taxed at 12.5%. |
| Debt Mutual Funds | If you sold debt mutual fund units before 3 years, the returns will be taxed as per the applicable tax slab of investors' income. | Profits on sell of debt mutual fund units after 3 years are called long-term capital gain. The returns derived will be taxed at slab rate. |
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