YOUR QUERIES: INCOME TAX: Tax on equity mutual funds sale only on LTCG above Rs 1 lakh

Therefore, in your case, assuming that mutual funds are equity-oriented, LTCG over and above Rs 1 lakh shall be taxed at prescribed rate.

By Chirag Nangia

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I am in the Rs 30-lakh tax bracket. I am salaried and have mutual fund investments of over one year. I am planning redemption of some of these. Which ITR form should I file? Is tax on LTCG applicable on the whole redemption amount or the amount over Rs 1 lakh?
—Sanjay Khar
Since you have income under head Salary and Long term Capital Gain (LTCG), you shall be required to file your Income Tax Return in Form ITR 2. Further, capital gains arising from transfer of long term capital assets being equity shares/ or units of an equity-oriented fund, shall be taxed at the rate of 10% of such capital gains exceeding Rs 1 lakh. Therefore, in your case, assuming that mutual funds are equity-oriented, LTCG over and above Rs 1 lakh shall be taxed at prescribed rate.

I am a senior citizen with central government pension, bank interest, dividends and capital gain on sale of shares. During FY 2020-21, I made capital gains on sale of shares. I sold some units of a balanced advantage fund at long term capital loss. How can I adjust the gain and the loss?
—Pankaj Oak
As per the Income Tax Act, long-term capital loss may be set off against income under head long term capital gain in a financial year. Therefore, you may set-off your long term loss from sale of mutual funds against long term gain on sale of shares for FY 2020-21.

I have salaried income of around `6 lakh. I have done some share trading both in equity delivery and F&O segments. The equity trading includes both intra-day as well as long-term trades. I have no other source of income like house property, etc. Which ITR form should I file?
—Rajesh P
Income from intra-day trading is classified as business income, taxable under head ‘profits and gains from business and profession’. In case of investing, a sale transaction gives rise to capital gains, which may be classified as long-term or short-term depending upon the period of holding. You may disclose income in Form ITR 3 that has been notified for individuals including salaried individuals, having income from business and profession. Capital gain/ loss (if any) may also be disclosed therein.

The writer is director, Nangia Andersen India. Send your queries to fepersonalfinance@expressindia.com