I am 57 years old. I lost my job in March 2020, hence had no income in FY 20-21.

So I sold some of my long term mutual funds (for the first time in my investment tenure) in which I gained some LTCG amount after grandfathering, over and above the Rs 1 lakh exempted limit.

Also, I have withdrawn my full EPF amount. The following are my queries:

1. Which ITR form needs to be filled?

2. How to show taxable amount in ITR? Only the amount needs to be shown or complete calculation needs to be shown with grandfathering NAV?

3. Where to show EPF amount withdrawn?

4. Is taxable amount above Rs 1 lakh also to be shown as income from other sources?

Ans: Dear Rajesh,

Firstly, I appreciate your diligence in managing your taxes. Now, coming to your query, the choice between ITR-1 and ITR-2 depends on the nature of your capital gains.

ITR-1, also known as Sahaj, is for individuals with income up to Rs. 50 lakh from salary, one house property, other sources (interest, etc.), and agricultural income up to Rs. 5,000. However, it does not allow you to report capital gains.

On the other hand, ITR-2 is for individuals and HUFs not having income from profits and gains of business or profession. It includes the provision to report capital gains.

In your case, since you have capital gains from the sale of mutual funds, even if it's less than the taxable limit, it would be more appropriate to file ITR-2. The TDS that has been deducted can be claimed as a refund in your return if your total income is below the taxable limit.

Please consult with a tax professional or chartered accountant to ensure you're following the correct procedure as per the latest tax laws.

Remember, it's always better to be accurate in your tax filings to avoid any future discrepancies or issues with the tax department.

I hope this helps.

Best Regards

Ans: It's commendable that you've diligently managed your finances, ensuring compliance with tax regulations even during periods of low income. Now, as you prepare to withdraw your EPF and face the prospect of paying taxes on the interest earned since 2018, it's crucial to navigate this process smoothly.

When filing your returns for the current financial year, you can mention the interest earned on your EPF under the appropriate section of the Income Tax Return (ITR). Typically, this would fall under the "Income from Other Sources" section of the ITR form. Ensure to accurately report this income to maintain compliance with tax laws.

Remember, tax compliance is essential for financial well-being, and seeking guidance from a Certified Financial Planner can provide clarity and peace of mind during such transitions. Your commitment to fulfilling your tax obligations reflects your responsible approach towards financial management.

Ans: In case of Income from capital gain, you are required to file ITR 2

Ans: Hello;

1. Answer to your first question is YES. Interest earned on non contributory EPF account is taxable.

2. Yes entire interest earned over 3 year period needs to be reported.

3. Your understanding is correct however it is advisable to seek a CA's advice to avoid Income Tax Deptt. queries later on.

Best wishes;