You can earn in two ways from mutual funds – Capital Gains & dividend. For capital gains, you are required to show the income and pay taxes, if any, when you file your returns. If you get dividends from mutual funds, the mutual fund deducts Dividend Distribution Tax (DDT) from the dividend paid to you.
Is TDS cut? Depends on your residential status
As a resident Indian, there will be no TDS when you sell/redeem your units. You are required to show the income and pay taxes, if any, when you file your returns.
However, for a non-resident Indian, while the tax laws remain the same for capital gains, TDS will be deducted, at the applicable rates, at the time of redemption.
To know more about how mutual funds are taxed, click here.