In FY27, hybrid mutual funds will be taxed based on their equity exposure. Schemes with 65%+ equity are treated as equity funds, with long-term gains taxed at 12.5% on profits above ₹1.25 lakh and short-term gains at 20%. Funds with 35-65% equity face long-term gains at 12.5% and short-term at slab rate. Those below 35% are taxed like debt funds.