YOUR REQUESTS: INCOME TAX: Tax on the sale of equity mutual funds only on LTCG above Rs 1 lakh
By Chirag Nangia
I am in the Rs 30-lakh tax bracket. I am an employee and have investments in mutual funds for more than a year. I plan to buy back some of them. Which RTI form should I file? Is the LTCG tax applicable on the total amount of the refund or on the amount greater than Rs 1 lakh?
Since you have income under Wages and Long-Term Capital Gains (LTCG), you will need to file your income tax return on ITR 2 form. In addition, capital gains resulting from the transfer of long-term capital assets term being equities an equity-based fund, will be taxed at the rate of 10% of such capital gains exceeding Rs 1 lakh. Therefore, in your case, assuming that the mutual funds are equity-focused, LTCG beyond Rs 1 lakh will be taxed at the prescribed rate.
I am a senior citizen with a central government pension, bank interest, dividends, and capital gain on the sale of shares. During the 2020-21 financial year, I realized capital gains on the sale of shares. I sold certain units of a long-term capital loss Balanced Advantage fund. How can I adjust the gain and loss?
In accordance with income tax law, long-term capital loss can be set off against income as part of the long-term capital gain of a financial year. Therefore, you can offset your long-term loss from selling mutual funds with a long-term gain on selling stocks for fiscal year 2020-2021.
I have a salaried income of around 6 lakh. I have done equity transactions in both the equity delivery and M&O segments. Trading in stocks includes both intra-day and long-term transactions. I have no other source of income like owning a house etc. Which RTI form should I complete?
Income from intraday trade is classified as business income, taxable under the heading “profits and gains from businesses and the profession”. In the event of an investment, a sale transaction gives rise to capital gains, which can be qualified as long-term or short-term depending on the duration of the holding. You can disclose income in the ITR 3 form which has been notified for natural persons, including employees, with business and professional income. Capital gains / losses (if any) may also be disclosed there.
The writer is director, Nangia Andersen India. Send your questions to [email protected]