How To File ITR For Mutual Funds On New Tax Portal

Mutual Fund investments are subject to market risks, and income tax too. Given the ease and passive nature of mutual fund investments, a lot of people invest in mutual funds. Like almost any other form of investment such as Fixed Deposits, stocks, etc., mutual funds also attract certain taxes on the returns gained via investing in them. Getting yourself familiar with taxation applicable on stock investments will help you understand taxation against mutual fund gains. Read on to know how to file Income Tax Return (ITR) for mutual funds on new tax portal.

A Little Overview Before Beginning

To begin with, there are two types of mutual funds. Equity-based and debt-based mutual funds.

While equity-oriented mutual funds attract tax similar to stock investments, debt mutual funds behave a little differently.

Digging deeper, there are two types of tax on mutual funds depending on their tenure: STCG(Short Term Capital Gain Tax) and LTCG(Long Term Capital Gain Tax).

For equity-based mutual funds, STCG tax is applicable for returns gained from the selling of mutual fund units within 1 year of investment. The tax rate applied here is 15%.

For LTCG, which is applicable for units sold after 1 year, gives some breathing space. Gains up to a limit of ₹1 Lakh are exempted from any tax. While any gain above ₹1 Lakh would attract a tax rate of 10%.

However, for debt-based mutual funds, which are mutual funds that invest in debt securities, anything sold and gained before 36 months or 3 years would fall under STCG, which would be taxed as per the tax slab of the investor. For LTCG, the tax rate is 20% in the case of debt funds.

One more point to note is that if the dividend to be received by anyone exceeds ₹5000, then there is a TDS liability of 10% on the dividend payout.

Now, let’s talk about dividends. The dividends received from your mutual fund investments are applicable to be taxed under your respective tax slab.

Also Read: Taxation In Mutual Funds

But how to file income tax return for the gains from their mutual fund investments, on the new Income Tax portal? Scroll down to find out.

Steps to File Income Tax Returns For Mutual Funds

Log On To The Portal

Visit www.incometax.gov.in and log in using your PAN details. Then you should verify your bank account details.
Next, go to the ‘File Return’ tab, and click on the assessment year you have to file the return for.
Choose the relevant ITR form for you. ITR-2 if you are salaried & have gains from mutual funds. ITR-3 if you’re a business person or professional who has gains from mutual funds.

Declaring The Dividend Income

You will need to declare the dividends received by you through your mutual fund investments. The details need to be entered in the section ‘Schedule of Other Sources’. Here, the detail of dividends received need to be entered on a quarterly basis. In the column of each respective quarter, the dividend received during that quarter should be written. In case you have been subjected to TDS on your dividend income, then you could apply for credit by entering the due details in the ‘TDS other than Salary’ section.

Also Read: A Detailed Guide For Checking TDS Status Using Your PAN Card

Calculate Your Due Capital Gain

This is pretty easy these days. You could simply access the app from which you invest in mutual funds, and fetch your capital gains statement.

Enter The Details

To enter details for STCG, select ‘Schedule CG’.
Check the option ‘111A’.
To enter LTCG details, opt for ‘Schedule 112A’.
Proceed to enter the necessary details.

You are also allowed to manage your Capital Loss in the ITR. For offsetting your Short Term Capital Loss, you could use either STCG or LTCG. But for offsetting Long Term Capital Loss, you can only use LTCG. Once done with all of this, keep in mind to ‘e-Verify’ your ITR.

Final Word

Investing wisely in Mutual Funds may help generate wealth. However, mutual fund gains are taxable. You can file for income tax return by following the steps mentioned above. If you are a new investor, start with Navi Mutual Fund and start hassle-free investing.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

Before you go…

Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Install the Navi app on Android or iOS now!
Or, maybe you’re looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to Rs. 10 crores. Install the Navi app on Android or iOS now and get instant in-principle approval right away! Interest rates starting at 6.46% p.a.
How about an affordable health insurance policy 👨‍⚕️ starting at a monthly premium of just Rs. 241? Install the Navi app on Android or iOS now and get your policy in under 2 minutes
Instead, want to put your savings into action and kick-start your investment journey 💸 But don’t have time to do research. Invest now with Navi Nifty 50 Index Fund, sit back, and earn from the top 50 companies.