Treatment of Mutual Fund in ITR

1. Yes, you can file ITR 4.
2. No declaration of investment. It is declared only when it is redeemed.

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• Form Selection: ITR-4 is acceptable if the user opts for presumptive taxation (e.g., Section 44ADA for professional income) and meets all eligibility criteria (e.g., gross receipts limits and no unlisted equity shares). If they maintain full books of accounts or have disqualifying assets like unlisted shares, they must use ITR-3.

• Mutual Fund Treatment: Unsold/un-redeemed mutual funds attract zero capital gains tax and do not require reporting in capital gains schedules, but the source of the ₹2,00,000 investment should be accounted for to match bank records and AIS/TIS data.

Since you have not sold or redeemed the mutual fund, there is no capital-gains income to report from it for FY 2024–25. The purchase of ₹2,00,000 itself is not reported as income in the ITR; any dividend received, however, is taxable and must be reported under the applicable income head.

For income under section 194J, ITR-4 may be used only if you meet its eligibility conditions and declare eligible professional income under the presumptive scheme in section 44ADA, including the applicable gross-receipt limit. If you are not opting for or eligible under section 44ADA, use ITR-3. Also check whether any mutual-fund dividend or other income was received during the year.

This filing choice is part of the broader workflow of reconciling 194J receipts, bank entries and investment records before selecting the return. Manual practice work makes these checks repetitive, while automation can reduce routine effort and leave tax treatment and filing decisions under professional judgment. At Jir AI we provide 2,000+ AI agents and 650+ integrations to streamline your practice’s day-to-day workload. WhatsApp us to explore how this can fit your workflow: https://wa.me/message/3HVOZ7HIY4ESC1