Being a freelance consultant I file ITR3 and 44ADA.

Could you respond to these queries?

a. How do I enter LTCG and STCG for Equity and Debt Mutual funds scheme?

b. Is Indexation applicable to Equity MF redemption – over 12 months?

c. For Equity MF, it asks me to enter in the tab titled Sec112, where it doesn't consider Indexation.

d. For MF, there is no separate tab.

Ans: Please elaborate your query.

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Question by Lekshminarayanan - Nov 13, 2020Hindi

I am using ITR 2 because I have LTCG from sale of MF units. My question is: Is it mandatory to fill in the Sec 112 A sheet in the ITR 2 form? In that sheet there is a column called ISIN code and the units that I sold belong to a scheme called UTI MEPUS and UTI does not have an ISIN code for this scheme!! I emailed UTI asking for the code and they replied they can't help me. What do I do? Fortunately, my profits are long term and in thousands, so no tax liability. Can I skip the CG sheet altogether?

Ans: As per the CBDT, scrip wise details are not required in income tax return forms for AY 2020-21 in cases where one is not eligible for the grandfathering concession. Since your capital gains are smaller, you can file your return without claiming the grandfathering benefit.

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Question by Sanjay - Nov 27, 2020Hindi

I am a freelance consultant and hence I file ITR3 with 44ADA. My queries: 1. How / where do I enter LTCG and STCG for Equity and Debt Mutual funds scheme? a. Is Indexation applicable to Equity MF redemption – over 12 months? b. For Equity MF, it asks me to enter in the tab titled Sec112, where it doesn't consider Indexation. c. For MF, there is no separate tab. 2. I have sold RSU's in USA? Where do I enter the details? How do I apply indexation to such transactions, since RSUs were held by me over 24 months?

Ans:

1. You need to enter LTCG & STCG of Equity & Debt Mutual funds in the schedule 'Schedule-CG: Computation of income under the head Capital gains' in ITR 3.

a. Indexation Benefit is not applicable to Indian listed Equity or Mutual Fund related instruments. You may avail an aggregate exemption of Rs.1 Lakh in a year towards LTCG from equity funds & listed stocks taken together.

b. In ITR-3, you need to enter under section 112(1): sale of Equity share or unit of equity-oriented fund on which STT is paid.

c. For Equity MF & listed stocks you need to fill details under Schedule 112A. Some of the details required are ISIN Code, Name of the share/Unit, No. of share/Units Sale Price, Fair value of consideration, Cost of acquisition. etc.

2. Your capital gains would be long term and will be taxed at 20% after indexation for inflation (same as unlisted shares since it is not listed on an Indian stock exchange).It may be noted that the capital gain is the difference between the fair market value on exercise and the sale price.It will need to be captured under Schedule CG of the ITR.

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