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    Reporting share-wise details for capital gains in ITR form for FY2018-19 is optional: CBDT

    Synopsis

    Previously, there was confusion among taxpayers on whether it is was mandatory to report the scrip-wise details as provided for in the updated software utility.

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    This is the first year after the introduction of LTCG where individual taxpayers are required to report the gains and pay tax, if any.
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    The Central Board of Direct Taxes (CBDT) has clarified that scrip-wise details for capital gains required to be filed in income tax return (ITR) are optional. Previously, there was confusion among taxpayers on whether it is was mandatory to report the scrip-wise details as provided for in the updated software utility for filing ITR for FY2018-19.

    According to the clarification, individuals can either report the aggregate capital gains directly in 'CG' schedule as mentioned in ITR-2 or use schedule 112A or Schedule 115AD(1)(iii) to report the capital gains per share/scrip wise as per their choice.

    Schedule 112A can be used by a resident individual who has earned capital gains from equity shares and/or equity mutual funds. On the other hand, schedule 115AD(1)(iii) can be used by non-resident individuals (NRI).

    Due to the continuous process of updating the ITR filing utility available on the e-filing website, the tax department has added two more schedules in the ITR forms namely, 112A and 115AS(1)(iii) where taxpayers were required to provide the capital gains for every share/scrip sold during FY 2018-19.

    On July 19, the tax department, on its e-filing website, has clarified, " Schedule 112A and 115AD(1)(iii) of long term capital gain are provided in the Income Tax Return software as per the Instructions to the Notified ITR form and based on taxpayer feedback. Taxpayers have an option to either enter the Scrip wise details of long term capital gains in Schedule 112A and 115AD(1)(iii) so that the correct values are populated in the CG Schedule or enter the self-calculated aggregate value of long term capital gains directly under respective items in schedule CG in terms with Sec 112A or 115AD(1)(iii) without entering scrip-wise details. Taxpayers may exercise either option based on their convenience."

    "The calculation of long-term capital gains on sale of listed shares or equity oriented mutual funds (where STT is paid at the time of sale has become a bit complicated due to the grandfathering clause. Taxpayers should note that the calculation logic relating to the grandfathering clause provided in the main capital gain schedule should not be made at an aggregate level. Further, making these calculations separately for each scrip may also result in wrong calculations if any scrip is sold and bought at different times and at different prices. These calculation logic related to the grandfathering clause should be applied separately for each transaction of sale to arrive at correct amount of gain," said Vaibhav Sankla, Managing Director, H&R Block India.

    This is the first year after the introduction of LTCG where individual taxpayers are required to report the gains and pay tax, if any.

    As per current income tax laws, LTCG arising from sale of equity shares and equity mutual funds are taxable if gains exceed Rs 1 lakh in FY 2018-19.

    "These newly inserted schedules are in the nature of tools to help taxpayers calculate the correct amounts for filling up the capital gains schedule. This is one more welcome step from the income tax department which would help taxpayers. These schedules have been inserted through schema changes. These schedules may have been kept optional as these are actually not a part of the 'notified forms. It is possible that these schedules would be made mandatory from the next year. Further, it is also possible that in the coming years, the income tax department may try to pre-populate these schedules based on the information it would obtain from the stock exchanges," said Sankla.

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    12 Comments on this Story

    Goutam Chakraborty2 days ago
    Schedule 115AD(1)(iii) deals tax on income of Foreign Institutional Investors from Capital Gains arising from transfer, so can a Non-Resident individual can fill this schedule?
    Ram Kishore Kishore351 days ago
    When I downloaded the print of this important message, the Economy newsletter eclipsed the contents. The result - feeling distressed to know the instructions of CBDT. R.K.Agrawal
    Kamal Thadani386 days ago
    The ITR-2 ver 2 excel form utility does not consider 1 lakh limit for the LTCG, it adds any value below 1 lakh to income as well. This is a major bug in the utility.
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