ITR for FY18 cannot be revised now, but you can still pay tax due

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Updated: May 01, 2019 11:46 AM

I have been investing in mutual funds since 2005 and have a fund value of Rs 20 lakh. If I withdraw all my units what will be the long term capital gains tax on it?

The long term capital gains is taxed at 20% and the short term gains will be taxed as per the applicable slab rate.

In FY 17-18, I received Rs 16,000 as interest on savings bank account. I did not mention that in my returns. Can I rectify my returns now and pay the tax on the interest amount?
– Shweta Mohan

No, the Income Tax Return for FY 17-18 cannot be revised now as the deadline for it was March 31, 2019. You can consider payment of tax and informing the tax department so that in the event of any enquiry by the tax department, you will be able to prove that you have fulfilled your onus of reporting the income and payment of consequent tax.

How should I account for the scholar-ship that my son receives every year and does he have to pay any tax on that?
—Ajay Srivastava

The scholarship can be considered tax-free if your son is pursuing a degree at an eligible institution, (it has a consistent staff, curricu-lum and enrolled student body), he uses the money for tuition and other needs like books, supplies and equipment. However, scholarship for other purposes like accommodation, living expenses, etc., has to be reported. If your son is aged less than 18, you need to report taxable part of it in your income and pay tax accordingly. Else, your son will need to report in his tax return if his total income exceeds minimum exemption limit.

I have been investing in mutual funds since 2005 and have a fund value of Rs 20 lakh. If I withdraw all my units what will be the long term capital gains tax on it?
—Gaurav Bisht

Yes, the long term capital gain tax will be levied whether these mutual funds are equity oriented or otherwise. As per the Finance Act 2018, exemption for LTCG on equity oriented mutual funds (including ELSS) has been withdrawn, therefore no exemption will be available in respect of LTCG from transfer of ELSS on or after April 1, 2018 and such LTCG in excess of Rs 1 lakh will be taxed at 10%. For investments made prior to February 1, 2018, the cost will be indexed up to FY 17-18 and then the gain shall be calculated. However, any loss arising due to such indexation shall be ignored. The short term capital gains shall be taxed at 15%.

Investments in debt funds are considered long-term if the period of holding is more than 36 months and the gain shall be calculated after indexation. The long term capital gains is taxed at 20% and the short term gains will be taxed as per the applicable slab rate.

(The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to
fepersonalfinance@expressindia.com)

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