ITR1 or ITR2, if equity mutual fund profit is 10,000/- (below 1 lakh)

ITR 595 views 6 replies

Jain JJ

Student

36 Points Joined July 2022

Are there any relevant sections in Income Tax Act which allows taxpayers to utilize ITR1, instead of ITR2 under following mentioned scenarios (if short term and long term capital gain is below 1 lac during redemption of equity mutual funds). (Note :- I have seen such clause in Income Tax Official Website, but can't retrive.)

i) Mr A (govt employee, salary Rs.8,00,000/-), bought some listed equity mutual fund on Dec 2020 and sold it on Nov 2021. The total profit was Rs.10,000. (Below 1 lakh). No STT was deducted during redemption. Can Mr. A use ITR1, instead of ITR2, since Rs.10,000 is below Rs. 1 lac.

ii) Mr A (govt employee, Salary Rs. 8,00,000/-), bought some listed equity mutual fund on Dec 2020 and sold it on Nov 2022. The total profit was Rs.12,000. (Below 1 lakh). No STT was deducted during redemption. Can Mr. A use ITR1, instead of ITR2, since Rs.12,000 is below Rs. 1 lac.

Replies (6)

prasad Nilugal

GST Practitioner & Accounts

15022 Points Joined March 2014

You have to file ITR2 because, no provision for
Capital gains in ITR 1.

Jain JJ

Student

36 Points Joined July 2022

Will 10k or 12k in above two different scenarios stands taxable, even if it is below Rs.1 lac ?

prasad Nilugal

GST Practitioner & Accounts

15022 Points Joined March 2014

In both cases holding period is less than 12 months, therefore it's short term capital gains, 1lac exemption is applicable only in case of Long term capital gains under section 112A of the Income tax act.
Just confirm one's again STT paid or not in both the case's and reply.

Jain JJ

Student

36 Points Joined July 2022

Originally posted by : prasad Nilugal
	In both cases holding period is less than 12 months, therefore it's short term capital gains, 1lac exemption is applicable only in case of Long term capital gains under section 112A of the Income tax act. Just confirm one's again STT paid or not in both the case's and reply.

2nd case concerns LTCG, holding period above 1 year (Dec 2020 - Nov 2022). "STT is not paid/deducted in 2nd case." It is confirmed. Can ITR1 be used if LTCG is below Rs. 1 lac (i.e 10k). (No logic behind to use ITR2, if proceeds are not taxed, more over such information of mutual fund redemption is already available in AIS.)

(*Regarding 1st case concerning STCG, STT paid/not paid, information is unclear, therefore shall be skipped*. Sorry for that. Only focus on LTCG, for time being.)