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Moneywize

Moneywize   |174 Answers  |Ask -

Financial Planner - Answered on Apr 27, 2024

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Asked by Anonymous - Apr 27, 2024Hindi
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I had invested Rs 20 lakh in MFs. I got Rs 90,000 as swp on this fund in this financial year. Shall i file ITR II or ITR I?

Ans: You can likely file ITR I in this scenario.

Here's why:

SWP (Systematic Withdrawal Plan) withdrawals from equity-oriented mutual funds held for more than a year are considered long-term capital gains. Up to Rs 1 lakh of long-term capital gains from equity funds are exempt from tax every financial year.

In your case, the SWP amount (Rs 90,000) is less than the exempt limit (Rs 1 lakh) for long-term capital gains from equity funds. Therefore, you likely won't have any capital gains tax to pay.

ITR I is generally for individuals with income from salary, pension, one house property, and other sources like interest income, which typically applies to SWP withdrawals if they are not capital gains.

However, it's important to consider these additional factors:

• Type of mutual fund: If the SWP is from a debt fund (non-equity), then the entire SWP amount is taxable and you might need to file ITR II.
• Other sources of income: If you have other taxable income that pushes you to a higher tax bracket, then filing ITR I or II might depend on the total tax liability.

For a more definitive answer, it's advisable to consult a tax advisor who can consider your specific situation. They can help you determine the tax implications of your SWP and recommend the appropriate ITR form to file.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |7133 Answers  |Ask -

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

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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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Latest Questions
Ravi

Ravi Mittal  |437 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 21, 2024Hindi
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Relationship
Dear Expert, I am in a committed relationship with a divorced woman who has a 6-year-old daughter. We have known each other for six years and became deeply involved in relationship after her divorce, which was finalized a year ago. She is currently 23 years old and was married at the age of 14. She endured domestic harassment during her marriage, leading to a separation, and has been living apart from her ex-husband for the past four years before their legal divorce. Presently, she has no source of income and relies on her parents, who themselves face financial difficulties. Despite these challenges, we both wish to marry and build a life together. However, I am facing some concerns that I hope you can help me address: I am uncertain about how to approach my parents regarding our relationship, given her previous marriage, her young child, and her challenging circumstances. Her ex-husband is my colleague and is currently unaware of our relationship. I fear that he will react negatively, potentially tarnishing my and my family’s reputation among friends and relatives or even attempting to harass us in the future. I'm seeking your guidance on the following: 1. Is marrying her and embracing this responsibility a prudent decision, considering her past and the challenges we may face? 2. How can I effectively address her ex-husband's behavior and protect our relationship and my and family's reputation? 3. What strategies can I use to gain my parents' understanding, acceptance, and support? 4. How can we ensure a strong and healthy future together, considering the complexities of our situation?
Ans: Dear Anonymous,

Let me address your issues one by one
1. Is marrying her and embracing this responsibility a prudent decision, considering her past and the challenges we may face?
I can't tell if it is prudent but I don't see it to be a dangerous decision as well. Yes, I understand your concerns, but you have been with her for a long time now. You must have considered all of these concerns beforehand. But if you think you are not sure, I would suggest you don't keep her hanging with hope. Discuss the doubts and concerns directly with her.

2. How can I effectively address her ex-husband's behavior and protect our relationship and my and family's reputation?
Her previous marriage involved domestic harassment and that's how the relationship ended. You had no part in it. You came into the picture after their separation. Why should her husband have any say in her life after divorce? Be strict with him from the very beginning. As a part of courtesy, you can let him know that you are considering marrying his ex, but besides that, you owe him no explanation.

3. What strategies can I use to gain my parents' understanding, acceptance, and support?
Highlight the positives in your partner; let them know how happy she makes you and how much she means to you. Parents being unsupportive in such cases are very common, but with some persistent counseling from your end can make things work out in your favor.

4. How can we ensure a strong and healthy future together, considering the complexities of our situation?
The complexities of the situation don't necessarily have to play part in your future together. Let her move on from this past and if anything, you should help her move past this divorce and harassment instead of bringing that into the future. Yes, it is a part of who she is, but is so much more than just a divorcee and a very young mother; she is the person you fell for- there must be some solid reason for that. After all, you fell knowing all the complexities. That makes her even more special. All you have to do is remember those.

Hope this helps.

...Read more

Ravi

Ravi Mittal  |437 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 23, 2024Hindi
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Relationship
I (29M) have connected with a Prospective match (26F) through an Arranged Marriage Platform & we both seem to be getting along quite well, interacting regularly via WhatsApp, Phone Calls & even met personally, Twice in the span of a Month. She had been in a Long Term Relationship with her Boyfriend since College, for almost 7 years. They had to Break-up an Year ago as their Parents had not approved of their Marriage (due to Caste Factor). But they both are still in touch as "Just Friends". This is what makes me uncertain about whether I'd be able to Trust her or not. We both get along quite well with each other on almost all other aspects. She regularly interacts with her Ex Boyfriend & whenever I try to ask her anything about it, she shuts me down, calling me 'Insecure' & says that her Past Relationship & Present 'Friendship' with her Ex Boyfriend are solely her Personal Matter & she doesn't owe me any explanation about it, not even after we get Married (assuming that we did). But she also tries to reassure me saying that she has moved on from the Relationship & now their Friendship is just 'Platonic' not 'Romantic'. But I am not able to Trust her completely. Will it be a Reasonable demand, from my side, if I ask her to cut off all contacts with her Ex? Or shall I secretly approach her Ex, without her knowledge & strictly warn him to stay off his Ex Girlfriend as she's soon going to be another Man's Wife? Or else, how should I build Trust with her, in spite of her 'Friendship' with her Boyfriend? Is it even worth trying or shall I move on to find another Woman who is Virgin like myself?
Ans: Dear Anonymous,
I understand your concerns. But, trust is important in a relationship. If she says they are just friends, if your relationship is healthy, you should be able to trust her.

Having said that, I would suggest you take some time to think if you can get to the point where you can actually trust her without being bothered about this friendship, and not forcefully trust her. Demanding to end the friendship or approaching her ex is not the right way to deal with this situation. You two are not married yet; you still have the time to rethink.

I don't know whether you should move on to someone else, but I believe that you should take some time to rethink. You two are still matches and these problems are trivial now, but once you get married, things will get even more complicated. You can either sort the matter by having an open conversation where you explain how her relationship with her ex bothers you, or you can both consider parting ways. But please do not commit just yet, especially since there is an existing issue.

Best Wishes.

...Read more

Ravi

Ravi Mittal  |437 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 23, 2024Hindi
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Relationship
I (30M) am a I am Virgin & never had any Relationship. I have been meeting & interacting with several ladies through Arranged Marriage Platforms, since the last 3 years. As per my Observation, almost all the Women have had Relationship(s) in the Past & most of them are not Virgin. Whenever I tried to ask them (Respectfully) about their Past Relationship(s), some of them refuse to talk about their Past & most others try to shift the Blame onto someone else, usually, it's either the Ex Boyfriend who'd been Unfaithful/Abusive or either Party's Parents who hadn't approved of their Marriage due to various Reasons. In the last 3 years, not even single Woman I'd met, had owned up & taken Responsibility for her Choices/Actions/Mistakes & the consequences arising out of it. This made it very difficult for me to trust most of them. Since I have no first-hand experience in Relationship dynamics, I am unable to understand, whether Girls/Women can NEVER be the one at Fault, in a Relationship? Is it always the Fault of the Male Counterpart, Parents or the Patriarchal Society? My biggest fear is, if I Marry such a Woman, will she ever take any Accountability for her Actions/Mistakes, which may cause Conflicts in our Future Married Life? Or will she conveniently shift the entire Blame onto me & project me as a Bad Husband? I may seem to be overthinking, but my Fears are not unfounded as Divorce cases accompanied by False Accusations from Wives have been increasing at an Alarming Rate. Preferably, I'd want to Marry a Virgin Woman, who hadn't been in Relationship like myself or atleast a Woman can be Honest & Transparent about her Past, taking Responsibility for her Actions/Choices/Mistakes. How do I find a Woman like this? Please guide me on how to Question a prospective match, to Judge her Character, realistically?
Ans: Dear Anonymous,
Your concerns make sense, but if you think about it, the majority of people do not know how to take accountability- it has nothing to do with gender. For instance, some men say they are acting like casanovas because of some girl they had a crush on, who rejected their proposal, and some say they have commitment issues because an ex-girlfriend had broken their trust. So, my point is, it's a people problem, not a woman problem.
Having said that, a good way to judge someone is to open up about yourself first. Next time you meet someone, instead of asking about her past, try talking about yours. Mention that you did not have a relationship, or you like people who can own up to their mistakes, etc. This way, you will make her feel comfortable enough to open up to you. It's not easy for women to disclose sensitive details, especially to men. And, ideally, their past should not play a part in their present, but since it is so important to you, try this technique.

Best Wishes.

...Read more

Ramalingam

Ramalingam Kalirajan  |7133 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

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Money
I have been allotted a Plot by authority on 25.05.2016 with a circle rate of ? 15,620.00, and i have been deposited the total amount ? 18,74,400.00 with the Hone Loan of ? 10,00,000.00. Further, authority has given me the letter in March 2024 to register the plot and pay the other charges like, Lease Rent One time, Location Charges, Sewer, Water Connection, Registration Charges etc. I have deposited all the charges of total = ? 3,37,242.00 and get registered with stap duty of ? 1,53,000.00 on 17.06.2024 and taken the possession on 18.11.2024. My total expenditure on the plot comes to ? 23,64,631.00 (Including Stamp Duty). I am planning to sell this plot on amount of ? 33,00,000.00 with the revised circle rate of ? 25,900.00. What are my tax liabilities in this transaction (LTCG or STCG) and any suggestion for exemption.
Ans: To determine your tax liability for the sale of the plot, let’s break down the situation:

Important Details from Your Case
Date of Allotment: 25-May-2016.
Date of Registration: 17-Jun-2024.
Date of Possession: 18-Nov-2024.
Total Cost of Acquisition: Rs. 23,64,631 (including stamp duty).
Sale Price: Rs. 33,00,000.
Circle Rate: Rs. 25,900 per square metre (revised from Rs. 15,620 per square metre).
The total holding period and your choice of taxation method will determine whether you incur LTCG (Long-Term Capital Gains) or STCG (Short-Term Capital Gains) and the corresponding tax liabilities.

Is the Gain Long-Term or Short-Term?
The date of allotment (25-May-2016) is generally considered the purchase date for real estate. Since you are selling the plot after holding it for more than 36 months (over 8 years in your case), your gain qualifies as Long-Term Capital Gain (LTCG).

Calculating the Capital Gains
Sale Price: Rs. 33,00,000.

Cost of Acquisition: Rs. 23,64,631.

Capital Gain: Rs. 33,00,000 – Rs. 23,64,631 = Rs. 9,35,369.

Taxation Options for LTCG (as per the updated rules for sales after 23-Jul-2024):

Option 1: Tax at 12.5% without indexation.

Tax = 12.5% of Rs. 9,35,369 = Rs. 1,16,921 (plus applicable cess and surcharges).
Option 2: Tax at 20% with indexation.
Indexed Capital Gain = Rs. 33,00,000 – Rs. 31,15,434 = Rs. 1,84,566.
Tax = 20% of Rs. 1,84,566 = Rs. 36,913 (plus applicable cess and surcharges).
Choosing the Better Taxation Option
Option 2 (with indexation) is clearly more tax-efficient in this case.
You will pay a lower tax of Rs. 36,913 instead of Rs. 1,16,921 under Option 1.
Suggestions for LTCG Exemption
To further reduce or eliminate your LTCG tax, you can explore the following exemptions under the Income Tax Act, 1961:

1. Section 54F: Invest in a Residential Property
If you use the sale proceeds to purchase or construct a residential property, you can claim exemption under Section 54F.
Conditions:
You must not own more than one house property on the date of transfer.
The new property must be purchased within one year before or two years after the sale, or constructed within three years.
The entire sale consideration should be utilised to claim full exemption.
2. Section 54EC: Invest in Specified Bonds
Invest up to Rs. 50 lakhs in NHAI or REC Capital Gain Bonds within six months of the sale.
The investment is locked in for five years and offers a safe, tax-saving option.
3. Capital Gains Account Scheme (CGAS)
If you cannot immediately utilise the sale proceeds, deposit them in a CGAS account before the filing deadline.
This allows you to keep the exemption intact while planning future investments.
Final Insights
Your plot sale qualifies for LTCG tax. The 20% with indexation option significantly reduces your tax burden.
To minimise tax, consider reinvesting under Section 54F or 54EC.
Consult a Certified Financial Planner or tax expert for tailored advice on reinvestment options and compliance with timelines.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Radheshyam

Radheshyam Zanwar  |1071 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 26, 2024

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Career
Namaste sir, main btech cse ka student hun 3 year me gayq hu 2nd year me meri 5 subjects me back aa gyi hai aur college me dher saare assignments , file likh likh kar mujhe skill ko develop karne ka time nahi mil paa raha hai kyoki mera time back subjects + assignment file karne me hi beet jata hai iski wajah se main college ki activities me participate nahi kar paa raha hu jisse main depressed hu. Mereko ko lag raha hai ki meri cgpa na girr jaaye please guide
Ans: Hello Tushar
Surprisingly, even after completing two years and now studying in the third year, you won't be able to manage your studies, assignments, and other activities. Please note that the same schedule applies to other students. Yet, if others can manage then why not you? Please check your regular timetable and other timetables. Soon you will come to know where you are going wrong. The engineering course is just a time management course. One of the possibilities that you might be lagging is, you may be doing engineering without any interest or you might be forced to do it. You did not mention where you are studying in a government or private college. Start creating an interest in CSE subjects, set your target for the future, and plan accordingly your studies. if lazy, then come out of that factor which is very common. Only 1 and 1/2 years remain in your hand. If you excel in your studies, your CGPA will also improve. Focus on your personality, communication skills, and other parameters that are badly needed at the time of campus interview. Talk with the senior and passed-out students and change yourself as early as possible. Last but not least, remove negative thoughts from your mind. For jobs, CGPA is not the only deciding factor. Overall curricular activities also matters.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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