ITR filing struggle: How return filing may get easy for systematic equity, MF investors

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September 3, 2020 5:21 PM

As data for SIP, STP, SWP transactions may run into several pages even for a single scheme, it may become a daunting task for investors to fill Schedule 112A if there are a number of schemes.

income tax, income tax return, ITR, ITR-2, ITR-3, long-term capital gain, LTCG, equity investments, equity-oriented mutual fund, MF, SIP, STP, SWP, Schedule 112AThe Schedule 112A page contains a table with 14 columns, of which 7 columns are to be filled by the assessees.

With a drastic overhaul of the tax system, the number of details asked for is getting increased every year. However, sincere efforts are being made by the Income Tax Department to keep things easy for the taxpayers while filing their Income Tax Return (ITR).

In case of disclosing long-term capital gains (LTCG), however, taxpayers are likely to face difficulty, as in some cases, huge quantities of data may have to be entered in Schedule 112A, which may become even troublesome due to the lack of information in a proper format.

The Schedule 112A page contains a table with 14 columns, of which 7 columns are to be filled by the assessees with data of every purchase transaction along with corresponding redemption data in separate rows.

This would make the filing process a tiring task not only for taxpayers, but also for Chartered Accountants filing return on their behalf, especially because the data given by Asset Management Companies (AMCs) and intermediaries are mostly not in the same order as required in Schedule 112A.

“The only item where investors may face issues is that share/MF reports prepared by Brokers/AMC’s may not be in sync with the data as required by the Tax Department,” said CA Karan Batra, Founder and CEO of CharteredClub.com.

income tax, income tax return, ITR, ITR-2, ITR-3, long-term capital gain, LTCG, equity investments, equity-oriented mutual fund, MF, SIP, STP, SWP, Schedule 112AFormat of the table in the Schedule 112A page.

Out of the 14 columns, an assessees need to fill Column Numbers – 2. ISIN Code, 3. Name of the Share/Unit, 4. No. of Shares/Units, 5. Sale-price per Share/Unit, 8. Cost of acquisition, 10. Fair Market Value per share/unit as on 31st January, 2018 and 12. Expenditure wholly and exclusively in connection with transfer.

Even after introducing Schedule 112A in July last year, the assessees were given the option to continue with declaring consolidated LTCG in Schedule CG because not much time was left before the due date of ITR filing and more importantly, ISIN Codes were not available with investors, especially that of Mutual Fund (MF) Schemes.

“Investors need to report only redemption of equities and/or equity-oriented MF units. However, if these were initially purchased as SIP, they will have to give purchase details of all such SIPs,” said Batra.

As data for transactions like Systematic Investment Plan (SIP), Systematic Transfer Plan (STP), Systematic Withdrawal Plan (SWP) may run into several pages even for a single equity-oriented MF scheme, it may become a daunting task for investors to enter the data in Schedule 112A if there are a number of schemes.

“A person has to manually key in all data line by line,” said Batra.

So, how to sort out the issue to make the filing of return easy for investors?

“This is a problem of the Asset Management Companies (AMCs), as they are sharing data in PDF format and not in excel. Moreover, the statements given don’t mention all the information, which are required by the ITR Filing Utility,” said Batra.

“So, it’s a fault of the AMCs and intermediaries like CAMs as well, as they are not generating data in proper format,” said Batra, adding, “If statements are given as per the table in Schedule 112A in excel format, we could copy paste all data all at once.”

But what should an investor do, unless all AMCs and intermediaries like CAMS, NSDL, CDSL, distributors, brokers etc provide detailed statements in a proper form and format?

It’s better for you to make a table identical to the table given in Schedule 112A page and start putting data for each transaction – be it SIP, STP and/or SWP – as and when the transactions take place.

The readymade excel table will make your life easy, as you may just copy and paste the transaction details in Schedule 112A at the time of filing your return of income.

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