ITR selection for salary plus MT sales

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If you have salary income, interest from savings/FDs, and have sold mutual funds, you might be wondering whether to use ITR1 or ITR2. Generally, if you have capital gains from selling mutual funds, even small amounts, you may need to file ITR2. However, if the capital gains are Long Term Capital Gains (LTCG) under Section 112A and are exempt (up to £1 lakh annually), you can still use ITR1 as it allows for declaring exempt capital gains.

Ritesh

Ritesh (Querist)
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05 June 2025 Hello sir ,

My wife is salaried and having income of 7 L . She have purchase Mutual fund (SIP ) of Rs 3 L and sale Mutual fund of 5000
She have also income of 2 L from intrest on saving and FD .
Which from should we choose ITR1 or ITR2 as Mutual fund sales

Ram Avtar Singh

Ram Avtar Singh (Expert)
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06 June 2025 File ITR-2 for your w..... in AY 2025–26, You have capital gains (even small ones, like ₹5,000 from mutual fund sale).
Check whether the mutual fund sale was equity-oriented and held for more than 12 months (then LTCG and exempt up to ₹1 lakh/year).

For FDs, check TDS deducted in Form 26AS or AIS and include interest as "Income from Other Sources".

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 June 2025 If LTCG is u/s. 112A and as such exempt, you can file ITR 1, as the option to declare such exempt CG is available in ITR 1 of AY 2025-26.

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Ritesh

Ritesh (Querist)
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06 June 2025 Thank you Ram Avtar Singh sir and Dhirajlal Rambhia sir.
Ram Avtar Singh sir Yes it is LTCG as MF hold more than 1 year. We have sale it just to verify is selling amount come to proper account or not.

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