Dear Mr. Parikh, I am 86 years age and retired from IOCL (PSU). Last year I sold 2 nos. of Mutual Fund. The difference between sale and cost price was about Rs. 13296 which is less than the taxable limit of Rs. 100000/-. A sum of Rs. 10834/- was deposited as TDS. I propose to fill - ITR Form 1 including the Capital Gain of Rs. 13296 in the Exempt Income (for Reporting Purpose). Kindly advice whether this is in order or should I fill - ITR Form 2 ?
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.