{"id":383647,"date":"2024-07-12T16:14:32","date_gmt":"2024-07-12T10:44:32","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=383647"},"modified":"2024-07-12T18:12:39","modified_gmt":"2024-07-12T12:42:39","slug":"fy23-24-how-to-report-long-term-capital-gains-in-the-income-tax-return","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/varsity\/fy23-24-how-to-report-long-term-capital-gains-in-the-income-tax-return","title":{"rendered":"FY23-24: How to report long-term capital gains in the income tax return?"},"content":{"rendered":"\n

I have capital gains on the sale of equity shares and mutual funds I bought in 2020. Which ITR form should I choose, and where should I report these gains in the ITR?<\/strong><\/p>\n

For listed domestic shares and mutual funds, if the holding period exceeds 12 months, the gains are considered long-term. Since the shares were purchased in 2020, the capital gains will be long-term and taxed at 10%.<\/p>\n

To report these gains, you need to file ITR-2 and enter the details under \u2018Schedule 112A.\u2019 In case you have trading income as well, you\u2019ll have to file ITR 3.<\/p>\n

What is the ISIN number? Where can I find that number?<\/strong><\/p>\n

ISIN, or International Securities Identification Number is a unique code that identifies securities like shares, bonds, and mutual funds. For example, the ISIN code of Tata Consultancy Services Limited is INE467B01029. You can find the ISIN code from your broker\u2019s tax P&L statement or search for it directly on the official NSDL website<\/a>.<\/p>\n

In the case of mutual funds, you\u2019ll find the ISIN in the capital gains statement provided by the fund house.<\/p>\n

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What exactly is the grandfathering clause applicable to capital gains? Will the details be automatically chosen, or do I have to manually fill them in?<\/strong><\/p>\n\n\n\n

Earlier, long-term gains from listed stocks and mutual funds were completely exempt from taxes. However, from 1st February 2018 onwards, these gains became taxable and to protect investors’ interests, the grandfathering clause was introduced.<\/p>\n\n\n\n

The grandfathering clause applies to shares purchased before 31st January 2018. It allows you to use the Fair Market Value (FMV) as of 31st January 2018 as the cost of acquisition (COA) instead of the actual purchase price. The idea behind this is that the profits made until January 31, 2018, to be exempt from tax. <\/p>\n\n\n\n

FMV is the highest market price recorded of a given security on that day. For mutual funds, the FMV is available in the capital gains statement provided by the AMC.<\/p>\n\n\n\n

Now, to report your long-term capital gains, go to Schedule 112A of your ITR and manually enter details here.<\/p>\n\n\n\n