i have invested in mutual funds long back in 2010 about rs180000/- now i want to redeem them to pay off housing loan.previously i have not shown the mutual funds in I.T returns .do i have to disclose now after redemption in this year returns.will i be taxed.now that is worth rs600000/-
will there be I.T scrutiny if one files revised returns
Dear Sir,
If these are equity mutual funds, then the gain is exempt from taxes. Otherwise you have to pay capital gain tax.
However, in both the case you have to show the transaction in ITR. You need not to report mutual fund purchases in ITR at the time of purchases.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hello Sir,
Which return did you file then in 2010. Was your Balance Sheet prepared and submitted to the Department.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi,
At the time of investing in mutual funds you are not required to show in your IT return but you are required to show all the dividend and/ or interest amount received in your IT return.
at the time of selling the mutual funds you need to show the capital gain amount depending on nature of MFs
and if they are equity oriented MF you are required to show capital gain as under exempted income. or otherwise if the MF are debt oriented then need to calculate capital gain and pay tax .
Yes, you have to show the redemption of mutual funds.
Mutual Fund Tax liability is as below:
Equity-oriented funds have no tax on long-term capital gains; i.e., if you sell your fund after 12 months from the date you bought it, you don’t pay capital gains tax.
To qualify as an equity-oriented scheme as per tax rules, the fund should have at least 65 per cent of its portfolio in domestic equity shares on an average
Tax on debt funds
Debt funds, as a category, include liquid, ultra short-term, short-term, income accrual, dynamic bond, and gilt funds. It also includes all debt-oriented funds as MIPs and other hybrid non-equity funds. International funds and gold funds also follow the same taxation as debt funds.
For these funds, short-term is a holding period of less than 36 months. Long-term holding is a period more than 36 months. On short-term capital gains, you are taxed at your slab rate.
On long-term capital gains, your tax is 20% of the gain with cost indexation benefits. Indexation is the method by which your cost is adjusted for inflation.
as far as my knowledge there is no need to revise your returns.
No need to show Mututal fund investment in IT Return in year of purchase in the year 2010.
Only show them in current Return and depend upon type of mutual fund its taxability will be determine.
As per our view it will not be taxed. Dont file revise returns.
Hi,
There is no need to Disclose Mutual Fund purchases in IT Returns. However, when you redeem the Units of the Fund, you will have to show the same in the IT Returns. Taxability is determined based on the Type of the Fund.
If it is a Tax Saver Fund, then the income is Exempt.
If it is an Equity-oriented Fund, then the income is Exempt if held for more than 12 Months. If held for less than 12 months, then it's fully taxable.
If it is a Debt Fund, then the income is fully taxable. Long-term Capital Gain (With indexation benefit) if held for more than 36 Months. Short-term Capital Gain if held for less than 36 Months.
As you propose to sell the mutual fund units "in this year", i.e., FY 2016-17, the profit or loss on sale of such units shall be disclosed in your IT returns for the assessment year 2017-18 for which the return is due for filing by 31st July 2017. There is no need to disclose purchase of units in the year of purchase. Only the income on sale will have to be offered to tax. Hence, there is no need to file revised IT Return.
