New Delhi: Many people invest in Mutual Funds and stock market to earn money. People hope to get better returns than Bank FDs by investing in them. But investors are also required to pay taxes on their profits earned from Mutual Funds and markets. It is also mandatory to file the ITR for stock trading, whether they are in profit or loss. If you are involved in the trading activities, let’s see how gains from Mutual Funds are taxed and which ITR you should file.
Capital Gains from Mutual Funds and Shares
Investors get returns from Mutual Funds and stock market in the form of dividends and capital gains. Any profit from Dividend is considered income for that year and is added to their total taxable income. Other profits arising from the sale of shares are called capital gains. Whether, it will be called short-term capital gains or long-term capital gains, it depends on the time period for how long you have held the investment.
Is filing ITR mandatory?
If you are involved in intraday trading, then it is mandatory for you to file an ITR and it does not matter whether you made profit or loss from trading. Traders are required to disclose their transactions under Business income. If an investor is taking capital gain exemption, then it is mandatory for them to file ITR for the capital gains arising from Mutual Funds/stock market.
Which ITR to file?
Taxpayers will have to file ITR on the basis of their income sources. For capital gains, you will need to File ITR-2. ITR-3 will be filed for income from business or profession. For capital gains arising from the sale or purchase of shares or Mutual Funds, you should file ITR-2. But income from stock trading is taxable under the head “Income from business or profession”. For this, you should file ITR 3.
ITR For Mutual Funds and Stocks: Investors get returns from Mutual Funds and stock market in the form of dividends and capital gains. Taxpayers will have to file ITR on the basis of their income sources. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
