A scheme that predominantly invests over 65% of its portfolio in equity shares in domestic companies is called an equity-oriented mutual fund scheme.
Debt mutual funds and schemes that hold lesser than 65% of their total portfolio in equities are taxed as per the rules given below:
Indexation is a process by which the purchase price of an asset is adjusted in a way to factor in inflation over the years. Indexation brings up the purchase price, reducing the overall gains on the investment for the purpose of taxation, which in turn results in lower taxes. Indexation reduces the tax outgo.