Income Tax Statement: How to Disclose Capital Gains of Mutual Funds When Filing the ITRs

Tax filing was previously a cumbersome process, with most of us using our CAs to get help. However, with e-filing and changes to filing method AY-2018-19, anyone can do it themselves as long as they follow the procedures and keep the relevant documents at their fingertips.

If you fill out an online form or on incometaxindiafiling .gov.in, you will see 7 ITR forms with their briefs. If you are an employee and do not have any capital gains, the ITR 1 form is the option for you. But if you are an employee or an HUF with a capital gain / loss, you will have to resort to ITR-Form 2.

Those who have sold mutual funds also fall into this category and must report their gains or losses. Let us know what constitutes capital gains for FMs and how your existing investments should be accounted for.

What is Capital Gain?

Investment property may be any form of wealth, real estate, vehicles, patents, trademarks, leasehold rights, machinery, jewelry, stocks and even mutual funds. Any gain or gain arising from the sale of such "capital property" is a capital gain. These gains may be taxable in your hands, subject to the tax rules of the year in which they occurred. The tax rules differ from one badet to the other. For example, the rules applicable to capital gains on mutual funds are different from those of mutual funds.

Mutual Fund Gains and Losses

Investment in FM does not immediately affect the I-T Department. However, if you make a profit or a loss after buying back your investment in MF, the I-T department wants to know. The nature of the investment, whether it is a debt fund or a stock fund, determines the exact tax impact for the company. # 39; investor.

In a CMF, capital gains realized on investments of less than three years are referred to as short-term capital gains. . Gains on investments held for more than three years are referred to as long-term capital gains. For equities, earnings become long-term if they are held for one year

Depending on your earnings (or losses), they must be properly disclosed when filing your income tax return.

Short-Term Capital and Long-Term Tax Earnings on MFs
Instrument	Short-Term		Long-Term
	Duration	Tax	Duration	Tax
Common Fund balanced investment	<1 year [19659021] 15%	> 1 year	10% above earnings of Rs 1 lakh (no indexation)
Common Equity Fund [19659024] <3 years old	At the applicable slab rate	> 3 years	20% (with indexation)
* The tax rate excludes the "cess" and the supplement, the if applicable
Data as of July 10, 2018

All funds will be subject to a certain repayment rate. Short-term taxes are of course higher, as shown in the table above, while long-term taxes are lower. Short- and long-term capital losses incurred during the redemption of mutual funds may also be claimed.

Dividend

Mutual fund plans provide for dividends. investors periodically. The dividend that is received in the hands of the investor is tax free up to Rs 10 lakh in a year. The dividend income of a large majority of MF retail investors would fall within this limit. However, the income has yet to be declared

Registration on the correct ITR Form

The ITR Form 2 is for individuals and HUF not engaged in any commercial or professional activity under any property but having income from sources other than wages. Be sure to remove the 2017-2018 fiscal year transaction records from all your fund platforms before you prepare to produce the ITRs.

Do not forget that the tax is calculated on the total value of the funds redeemed and not on an individual fund. For example, you will be required to pay 10% of LTCG only if the earnings of your portfolio exceed Rs 1 lakh, and not one fund.

Unlike ITR 1 and For 4 forms, you can not file this form online. You will need to download the income tax XML file for ITR 2 from the Ministry of Income Tax website, fill it out and submit a statement by logging in and downloading the XML file on the portal of the tax

. have not claimed the same thing while submitting the investment to your employer, you can do it in the form here. Remember that for FPs, only the categories of pension funds and ELSS can be claimed for deductions under Article 80C up to a maximum of Rs 1,50,000

Recall- you that if you hold other fixed badets like property, gold and more have made gains through their sale, you will have to list the same thing in the same XML form. Income accrued from the rental of property must also be entered on the form.

(The author is CEO of Bankbazaar.com)