Income tax returns (ITR) are a crucial part of any individual’s financial planning. It is mandatory to file ITR if you have earned any capital gains during the financial year. Capital gains can be earned from various sources such as shares, mutual funds, properties, etc. In this article, we will focus on ITR filing in case of capital gain earned from shares, mutual funds, and properties.
Capital gains are the profits that you earn from the sale of any capital asset, such as shares, mutual funds, or properties. These gains are classified into two categories – short-term capital gains (STCG) and long-term capital gains (LTCG). STCG is the profit earned from the sale of assets that are held for less than 12 months, while LTCG is the profit earned from the sale of assets that are held for more than 12 months.
When it comes to ITR filing, it is important to differentiate between STCG and LTCG, as the tax rates for both are different. STCG is taxed at the individual’s applicable income tax slab rate, while LTCG is taxed at a flat rate of 20% (with indexation benefit).
If you have earned capital gains from shares or mutual funds, you need to file ITR-2 or ITR-3, depending on whether you have any business income or not. In case you have earned LTCG, you need to mention the details of the capital gains in Schedule CG of the ITR form. This schedule requires you to provide details such as the date of purchase and sale, the cost of acquisition, the selling price, and the capital gains earned. The tax payable on the capital gains earned is calculated automatically by the ITR software.
If you have earned capital gains from the sale of a property, you need to file ITR-2. In this case, you need to mention the details of the property sold in Schedule CG. You also need to provide details of the cost of acquisition, the selling price, and the capital gains earned. If you have invested the capital gains in another property, you need to mention the details of the new property in Schedule SI of the ITR form.
In addition to filing ITR, it is important to keep all the relevant documents such as contract notes, bank statements, sale deeds, purchase agreements, and property documents in order. These documents may be required by the income tax department for verification purposes.
If you have earned capital gains from the sale of shares, mutual funds, or properties, it is advisable to take the help of a chartered accountant or a tax consultant in Gurgaon. They can guide you through the process of ITR filing and help you reduce your tax liability by taking advantage of various exemptions and deductions available under the income tax laws.
In conclusion, ITR filing is mandatory if you have earned any capital gains during the financial year. If you have earned capital gains from shares, mutual funds, or properties, it is important to differentiate between STCG and LTCG and file the relevant ITR form accordingly. It is also advisable to keep all the relevant documents in order and seek the help of a professional if required. By following these steps, you can ensure that your ITR filing is accurate and hassle-free.
Due Dates for Filing ITR for Financial Year 2022-23 and Assessment Year 2023-24
For individuals, the due date for filing ITR is generally July 31st of the assessment year. For example, for the financial year 2022-23, the due date for filing ITR will be July 31, 2023. However, the due date can be extended by the Income Tax Department in certain cases.
Here are the ITR filing dates for different categories of taxpayers:
- Individuals and HUFs (non-audit cases) – July 31st of the assessment year
- Businesses (audit cases) – October 31st of the assessment year.
It is important to note that the above dates may be extended by the Income Tax Department for various reasons such as natural calamities, technical issues, and other unforeseen circumstances.
It is advisable to file ITR before the due date to avoid late filing fees and penalties. If a taxpayer fails to file ITR before the due date, they can still file a belated return by March 31st of the assessment year. However, there are certain consequences for filing a belated return, such as a penalty for late filing and loss of certain benefits and exemptions.
In addition, if a taxpayer fails to file ITR even after the due date and the belated return deadline, they may be subject to penalty under the Income Tax Act.