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Ramalingam Kalirajan |6971 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Debashish on Mar 26, 2024Hindi

I had invested Rs 15 lac on Mutual Fund. I got Rs 60,000 in this financial year as swp on this fund. Shall i require to file tax return on itr2?

Ans: Yes, you are required to file a tax return on ITR-2 for the financial year if you have received income from SWP (Systematic Withdrawal Plan) on your mutual fund investment. SWP income is considered as capital gains and needs to be reported in your income tax return.

Reporting SWP Income in ITR-2
In ITR-2, you need to report SWP income under the head "Income from Capital Gains." Here's how to report it:

Calculate Capital Gains: Determine the capital gains on your mutual fund investment from which you received the SWP income. Capital gains can be either short-term or long-term, depending on the holding period of the mutual fund units.

Select the Appropriate Schedule: In ITR-2, navigate to Schedule CG (Capital Gains). Here, you need to fill in the details of your capital gains from different sources, including mutual funds.

Enter Details of Mutual Fund Transactions: Provide details of the mutual fund investment from which you received the SWP income. Include information such as the name of the mutual fund, sale consideration (amount received through SWP), and cost of acquisition.

Calculate Taxable Capital Gains: Calculate the taxable capital gains by deducting the cost of acquisition (purchase price) from the sale consideration (SWP amount). Depending on the holding period, apply the applicable tax rates for short-term or long-term capital gains.

Enter Taxable Capital Gains in ITR-2: Enter the taxable capital gains in the relevant section of Schedule CG. Ensure accurate reporting to avoid any discrepancies.

Additional Considerations
Tax Implications: SWP income from mutual funds is subject to capital gains tax. Short-term capital gains (STCG) are taxed at your applicable income tax slab rate, while long-term capital gains (LTCG) are taxed at 10% without indexation if they exceed Rs. 1 lakh.

Tax Deduction at Source (TDS): If TDS has been deducted on your SWP income, ensure that you claim credit for the same while filing your tax return. Mention the TDS details in the appropriate section of ITR-2.

Conclusion
Filing a tax return on ITR-2 is mandatory if you have received SWP income from your mutual fund investment. Ensure accurate reporting of capital gains from SWP in Schedule CG of ITR-2 to comply with income tax regulations. If you have any doubts or require assistance, consult a tax professional or Certified Financial Planner (CFP) for guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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