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Income from debt mutual funds in ITR4

krishna (learner) (1 Points)

05 May 2025

Can i show income from debt mutual funds which i sold within a year in itr4 as income from other sources or should it be only shown as capital gains. Problem is there is no option to show this as capital gains in itr4. Please suggest.

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3 Replies

Uday Konu (2 Points)
Replied 05 May 2025

It should only be shown as Capital Gains. If not ITR 4, then Use ITR 2 or ITR 3 based on your other sources of income.

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Megha S (14 Points)
Replied 07 May 2025

In Income Tax Return (ITR) filing, the income from debt mutual funds is generally treated as capital gains when you sell the units. If you sell the mutual fund units within 3 years (short-term capital gains), the gains are taxed as short-term capital gains (STCG), and if you sell them after 3 years (long-term capital gains), they are taxed as long-term capital gains (LTCG).

Regarding your situation:

Short-term Capital Gains (STCG): If you sold the debt mutual fund units within one year, the income from the sale would be classified as short-term capital gains. This income should be reported under “Capital Gains” in the ITR form, even though you might not see an exact "Debt Mutual Fund" option in ITR4.
ITR4 and Capital Gains: ITR4 is primarily for businesses and professionals, and capital gains are typically reported under "Schedule CG" in forms like ITR2 or ITR3. However, you can report short-term capital gains from debt mutual funds under “Income from Capital Gains” (in the section for "Schedule CG" - Part A, in the ITR4). If ITR4 is not showing this section properly, you might want to use ITR2 or ITR3, which are designed to accommodate capital gains more comprehensively.

If you're unable to see the "Capital Gains" section in ITR4 and the software doesn't allow it, I would recommend either:

Using ITR2 for better reporting of capital gains or
Consulting a tax expert for assistance in filing correctly.

Megha S (14 Points)
Replied 07 May 2025

Regarding your situation:

Short-term Capital Gains (STCG): If you sold the debt mutual fund units within one year, the income from the sale would be classified as short-term capital gains. This income should be reported under “Capital Gains” in the ITR form, even though you might not see an exact "Debt Mutual Fund" option in ITR4.
ITR4 and Capital Gains: ITR4 is primarily for businesses and professionals, and capital gains are typically reported under "Schedule CG" in forms like ITR2 or ITR3. However, you can report short-term capital gains from debt mutual funds under “Income from Capital Gains” (in the section for "Schedule CG" - Part A, in the ITR4). If ITR4 is not showing this section properly, you might want to use ITR2 or ITR3, which are designed to accommodate capital gains more comprehensively.