How are my index fund gains taxed when I sell, and does each SIP count separately?

For an equity index fund in India, gains are taxed only when you actually sell, and how long you held decides the rate. Sell within a year and it is short-term; hold longer and it is long-term, which has historically enjoyed a lower rate plus an annual exemption on part of the gains. The catch with a SIP is that every installment is its own purchase with its own holding date, and sales are usually matched oldest-first, so your earliest units may qualify as long-term while recent ones do not. This means a single redemption can be part short-term and part long-term. The exact rates, the exemption limit, and the holding thresholds change from budget to budget, so do not plan around a specific number here. Confirm the current capital gains rules with a CA or a qualified advisor before you sell.