How to file income tax return: Reporting LTCG details while filing the income tax return (ITR) for the assessment year 2019-20 has now been simplified.

ITR for Capital Gains: For all those taxpayers who have to report long-term capital gains (LTCG), especially from equity shares and equity mutual funds in the financial year 2018-19, there is some piece of good news. Reporting LTCG details while filing the income tax return (ITR) for the assessment year 2019-20 has now been simplified. The LTCG tax on such equity investments was re-introduced for the FY 2018-19 and reporting capital gains in the ITR forms appeared challenging to most taxpayers.

To report the LTCG, the assessee was required to provide a separate computation of capital gains for each scrip (equity share) or units of mutual fund sold during the year and the aggregated amount should be provided. However, on July 19, CBDT has clarified that the assessee will now have the option to either enter the scrip wise details of long term capital gains or enter the self-calculated aggregate value of long term capital gains directly under respective items without entering scrip wise details. As a taxpayer, now one may exercise either option based on one’s convenience.

According to the CBDT update, “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. This facility is now available in ITR-2, 3, 5 & 6 utilities.”

It is important to note that earlier LTCG from equity shares and equity MF were tax-free. However, from FY 2018-19, LTCG is subject to 10 per cent tax on gains above Rs 1 lakh in an FY. The taxation is, however, grandfathered i.e. gains made till Feb 1, 2018 remains outside the tax net.

Hopefully, with the recently introduced option to either show break-up of LTCG or aggregate amount, the taxpayers will find it easier to file the ITR for AY 2019-20. Those filing income tax return in ITR Form 2,3,5 and 6 will stand to benefit from this new move from CBDT and will be able to complete the ITR filing process in time as the income tax return filing last date is July 31.