I have sold MF units which is hold more than 3 years. The capital gain is less than Rs 30,000. What is the tax implication? Do I need to file ITR-2 for redemption instead of regular filing of ITR-1?

Ans: yes, you need to file returns and mention capital gain

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Ans: No tax if the profit is less than 1L. The grandfathering effect will be as on 31st Jan 2018. The tax rate post the benefits is 10%. The ITR to be filed is ITR 2 assuming you are a salaried person.

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: 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.