Tax Return: How to Quickly Enter LTCG Details on Multiple SIP Transactions

After redeeming their investments, equity mutual fund investors face the daunting task of capturing the investment details regarding long-term appreciation in their ITR.

Investing through systematic investment plans (SIPs) in equity mutual funds (MFs) is seen as a comparatively less risky route for making long-term equity investments. However, after redeeming their investments, these investors face the daunting task of entering the details of the Long Term Capital Gains (LTCG) investment in their tax return (ITR).

The redemption, exchange or change of regime of these FCP units generates capital gains. If operations on FCP equities units are carried out within a period of one year from the date of investment, these operations result in a short-term capital gain or loss (STCG) and transactions over ‘one year from the date of investment translates into long-term capital. gain (LTCG) or loss.

When the LTCG on equity mutual fund transactions was tax-exempt, taxpayers investing in ELSS (Equity Linked Savings Plan) and other equity-based plans had no problem depositing their RTI .

However, with the LTCG on stocks becoming taxable, filing their tax return has become a headache for these investors, especially if the investments are made through the SIP.

While the STCG statement on actions and action-oriented MF programs has remained the same, a separate page named 112A has been inserted in the ITR forms (except ITR 1 and ITR 4) to fill in the details related to the LTCG on actions and action-oriented MFs. diets.

Equity investors are expected to enter the investment details of the redemption of shares and / or equity fund units giving rise to LTCG on page 112A.

Thus, even employee investors cannot use ITR 1, if they redeem their investments made in ELSS or any other equity oriented program.

In addition, the registration procedures will be different for investments made on or before January 31, 2018 and after that date.

Page 112A can be completed in two ways: either by uploading the CSV spreadsheet available on the page, filling it in and uploading it, or by adding each entry separately to the page.

By entering hundreds of entries into the CSV spreadsheet as directed and uploading it can be a faster way to complete the page, but the compatibility and accuracy of the field filling often results in the sheet being rejected. at the time of download.

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Thus, it may be easier to enter the individual details related to the buyout of lump sum investments in the page instead of using the CSV spreadsheet.

However, for MF investors investing through the SIP channel, entering the investment details for each program for each month requires both time and patience.

In order to reduce the number of entries and save time, investors can separately associate the details of investments made before and after January 31, 2018 for each program which are repaid on the same date.

For investments made after January 31, 2018, entries must be made for the “Acquisition cost”, the “Total value of the consideration” and “Expenses entirely and exclusively linked to the transfer”.

Thus, as with lump sum investments, the total value of the consideration for the redemption of SIP investments made on a particular date can be calculated by adding the redemption values ​​of investments made after January 31, 2018.

Likewise, the total acquisition cost can also be calculated by adding the corresponding SIP investment figures or multiplying the SIP amount by the number of corresponding investments. For example, if 24 installments of a SIP amount of Rs 10,000 – invested after January 31, 2018 – are repaid on March 15, 2021, the total acquisition cost would be Rs 2,40,000 (excluding stamp duty).

In the event that there are no expenses entirely and exclusively linked to the transfer, the acquisition cost and the total value of the consideration for the 24 SIP payments can be grouped together and entered on page 112A, instead of 24 entries.

For investments made by January 31, 2018 at the latest, the entries to be made on page 112A are: “ISIN code”, “Name of the share / unit” (which will be automatically taken by the system), “ No. of Shares / Units’, ‘Sale price per Share / Unit’, ‘Acquisition cost’, ‘Fair market value per share / unit as at January 31, 2018’ and ‘Expenses wholly and exclusively related to the transfer’. The system will calculate the “Total Consideration Value” by multiplying the number of shares / units by the sale price per share / unit.

Thus, for the same equity-oriented FCP units acquired via SIP no later than January 31, 2018 and redeemed on the same date, the only input variable in terms of down payment is the number of units, which varies with the investment date as the markets fluctuate.

As the amount of the SIP remains fixed for each payment, the acquisition cost will also be the same for each payment. Thus, for a given number of SIP payments reimbursed on the same date, the total acquisition cost can be obtained by multiplying the SIP amount by the number of payments. For example, for 100 payments made on or before January 31, 2018 with a SIP amount of Rs 10,000, the total acquisition cost will be Rs 10 lakh.

The total number of units redeemed on a given day can be obtained by adding the units to the 100 SIPs and in a single transaction, as the selling price per unit remains the same for the particular plan on the same redemption day. In addition, there will be no variation in the ISIN code and in the fair market value per share / unit as at January 31, 2018.

Thus, in the event that there are no expenses totally and exclusively linked to the transfer, instead of making 100 entries, a single entry can be made for units of the same FCP with variable capital acquired no later than January 31, 2018 and redeemed. on the same date, to save time.

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