By Chirag Nangia
From the mutual fund web site, I have downloaded my capital gains statement. However, I am confused with regards to the LTCG quantity which I really should declare in my ITR-2. Under Section C, the ‘Long Term without index’ is Rs 16,714.55. But when declaring LTCG, I have to mention ‘Indexed LTCG’, based on the year of investment.
a) Please let me know how I need to have to calculate this quantity. Should the indexed LTCG quantity be declared in ITR-2 or Rs 16,714.55?
b) If indexed LTCG has to be declared, why is that mutual fund AMC does not provide it in the statement?
—S R Hiremath
Long term capital gains on sale of listed units of equity oriented mutual funds (held for a period more than 12 months) had been exempt up to March 31, 2018. With impact from April 1, 2018, such gains in excess of Rs 1 lakh have been made taxable at the price of 10%, offered Securities Transaction Tax (STT) has been duly paid. Further, the advantage of grandfather-ing provisions applies to units acquired up to January 31, 2018.
Accordingly, in case of equity mutual funds bought on or prior to 31st January 2018, the Cost of Acquisition shall be larger of—(i) the expense of acquisition of such asset and (ii) decrease of—(A) fair industry worth of such asset and (B) sale consideration of such asset. Accordingly, capital gains shall have to be computed by deducting expense of acquisition (determined as above) from the sale consideration, which shall be topic to tax at 10% below Section 112A.
Please note that the advantage of indexation shall not be obtainable even though computing capital gains as such.
However, if capital gains have been derived from sale of debt mutual funds, then capital get shall be taxable at the price of 20% and you shall be permitted to avail the advantage of indexation.
Indexation can be completed applying the Cost Inflation Index (CII) obtainable on the earnings tax web site. Multiply the expense of acquisition by the CII of the year in which the mutual funds had been transferred and then divide the item by the CII for the year in which the mutual funds had been bought.
Please note that debt mutual funds are categorized as extended term if held for a period more than 36 months, whereas equity-oriented funds are viewed as as extended term if held for a period more than 12 months.
The writer is director, Nangia Andersen India. Send your queries to