{"id":5656,"date":"2025-06-06T14:16:12","date_gmt":"2025-06-06T08:46:12","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=5656"},"modified":"2025-06-06T14:16:16","modified_gmt":"2025-06-06T08:46:16","slug":"declare-mutual-fund-investment","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/","title":{"rendered":"How To Declare Mutual Funds in ITR &amp; Disclose Capital Gains in India?"},"content":{"rendered":"\n<p>Filing<a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax-declaration-itd\/?utm_source=blog&amp;utm_medium=article\"> Income Tax<\/a> Returns (ITR) is your federal duty if you earn an income in the financial year exceeding Rs. 2.5 lakh. When mutual fund tax filing your returns, you have to declare incomes earned from various sources. If you have made specific investments that earn you tax deductions from tax on mutual fund dividends or exemptions, the same should be declared in the ITR.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/is-mutual-fund-a-safe-investment-risks-in-mutual-fund-investment\/?utm_source=blog&amp;utm_medium=article\">Mutual fund investments<\/a> also give you tax benefits if you choose the<a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-elss\/?utm_source=blog&amp;utm_medium=article\"> ELSS<\/a> schemes. Moreover, when you redeem your investment and gain profit or suffer a loss, the same should also be reported on your tax return. Let\u2019s understand how to declare mutual fund investment in ITR and the mutual fund tax implications.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#Declaring-Tax-Eligible-Mutual-Fund-Investment\" title=\"Declaring Tax-Eligible Mutual Fund Investment\">Declaring Tax-Eligible Mutual Fund Investment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#Declaring-Capital-Gains-on-Mutual-Fund-Redemption\" title=\"Declaring Capital Gains on Mutual Fund Redemption\">Declaring Capital Gains on Mutual Fund Redemption<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#How-to-Declare-Capital-Gains-from-Mutual-Funds\" title=\"How to Declare Capital Gains from Mutual Funds?\">How to Declare Capital Gains from Mutual Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#Setting-off-of-Capital-Loss-from-Gains-on-Redemption-of-the-Fund\" title=\"Setting off of Capital Loss from Gains on Redemption of the Fund\">Setting off of Capital Loss from Gains on Redemption of the Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#ITR-Form-2\" title=\"ITR Form 2\">ITR Form 2<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/declare-mutual-fund-investment\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Declaring-Tax-Eligible-Mutual-Fund-Investment\"><\/span>Declaring Tax-Eligible Mutual Fund Investment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/information-on-tax-saving-mutual-funds\/?utm_source=blog&amp;utm_medium=article\">Equity Linked Saving Schemes<\/a>, or ELSS, are equity-oriented mutual fund schemes with a distinct tax advantage. Investment into these schemes allows you a deduction from your taxable income to the tune of Rs. 1.5 lakh under Section 80C of the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">Income Tax<\/a> Act, 1961, that you may declare under the heading \u2018Chapter VI A deductions\u2019 in your ITR.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Declaring-Capital-Gains-on-Mutual-Fund-Redemption\"><\/span>Declaring Capital Gains on Mutual Fund Redemption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Whenever you redeem your<a href=\"https:\/\/www.tickertape.in\/blog\/invest-in-mutual-funds\/?utm_source=blog&amp;utm_medium=article\"> mutual fund<\/a> investments, any profit or loss incurred is termed as capital gain or capital loss, respectively. The detail of such gains or losses should also be declared in your ITR for tax on mutual fund redemption.<\/p>\n\n\n\n<p>However, before jumping on how to declare capital gains tax <a href=\"https:\/\/www.tickertape.in\/blog\/mutual-funds\/\">mutual funds<\/a>, here\u2019s a quick look at how the gains are taxed:<\/p>\n\n\n\n<ul>\n<li>In the case of<a href=\"https:\/\/www.tickertape.in\/blog\/equity-mutual-funds\/?utm_source=blog&amp;utm_medium=article\"><strong> <\/strong>equity mutual funds<\/a>, gains earned within 12 mth are called<a href=\"https:\/\/www.tickertape.in\/blog\/what-is-short-term-capital-gain-on-shares\/?utm_source=blog&amp;utm_medium=article\"> short-term capital gains<\/a>. Such gains are taxed at 15%. On the other hand, gains earned after 12 mth are<a href=\"https:\/\/www.tickertape.in\/blog\/long-term-capital-gain-on-share\/?utm_source=blog&amp;utm_medium=article\"> long-term capital gains<\/a>. Such gains are tax-free up to Rs. 1 lakh, and gains exceeding the limit are taxed @10%.<\/li>\n\n\n\n<li>In the case of<a href=\"https:\/\/www.tickertape.in\/blog\/things-to-consider-debt-mutual-fund\/?utm_source=blog&amp;utm_medium=article\"><strong> <\/strong>debt mutual funds<\/a>,<strong> <\/strong>gains earned within 36 mth are called short-term capital gains. They are taxed at your income tax slab rates. However, gains earned after 36 mth are called long-term capital gains. They are taxed at 20% with indexation, a process through which an asset\u2019s acquisition cost is inflated\/adjusted to bring it at par with current rates, taking inflation into account.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-to-Declare-Capital-Gains-from-Mutual-Funds\"><\/span>How to Declare Capital Gains from Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Now that you know how mutual fund gains are taxed and filing ITR for capital gains, it\u2019s time for step two, which is how to declare mutual fund investment in ITR.<\/p>\n\n\n\n<p>Since mutual fund returns are called capital gains, they are recorded under the heading \u2018Income from capital gains.\u2019 You need to mention the amount of gain incurred and the respective tax liability and tax treatment for mutual funds.&nbsp;<\/p>\n\n\n\n<p>Similarly, losses on redemption should be declared as capital losses under the same heading. You can use the losses to set off the profits earned from other mutual fund investments.<\/p>\n\n\n\n<p>When calculating the amount of capital gains, you can deduct the brokerage paid to your mutual fund distributor or broker, if any, from the gains incurred.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Setting-off-of-Capital-Loss-from-Gains-on-Redemption-of-the-Fund\"><\/span>Setting off of Capital Loss from Gains on Redemption of the Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you have incurred a capital loss in the financial year, then on redeeming your mutual fund investments, you can use the loss to offset the profits earned on another scheme. This set-off is allowed in the same financial year as well as for eight subsequent financial years. To offset your capital losses against gains and reduce your subsequent taxation on mutual funds, you should file your ITR with the income tax department within the due date. Failure to do so would not allow you to carry forward your losses for set-offs from future capital gains statement for ITR.<\/p>\n\n\n\n<p>Here are the rules of setting off losses against gains:<\/p>\n\n\n\n<ul>\n<li>Short term capital loss can be set off against either short term or long term capital gains<\/li>\n\n\n\n<li>Long term capital loss can be set off only against long term capital gains<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ITR-Form-2\"><\/span>ITR Form 2<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You would have to file your returns in ITR Form 2 if you have:<\/p>\n\n\n\n<ul>\n<li>Capital gains or losses from a mutual fund redemption<\/li>\n\n\n\n<li>You are a salaried taxpayer or a Hindu Undivided Family (HUF)<\/li>\n<\/ul>\n\n\n\n<p>In this ITR form for mutual funds filing capital gains in ITR, the details of the capital gains or losses suffered would have to be mentioned.<\/p>\n\n\n\n<p>Suppose you incur capital gains or losses from an <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> mutual fund on which<a href=\"https:\/\/www.tickertape.in\/blog\/securities-transaction-tax\/?utm_source=blog&amp;utm_medium=article\"> Securities Transaction Tax<\/a> (STT) has been paid. Then, in that case, you need to mention the individual details of every mutual fund scheme redeemed.&nbsp;<\/p>\n\n\n\n<p>You will also need to fill out Schedule 112A for each scheme that you have redeemed in a financial year and on which you have earned a capital gain or loss.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you have invested in tax-saving ELSS schemes, you may claim a tax deduction when you declare your investment in your mutual fund Income Tax Returns (ITR). Moreover, any gains or losses incurred on redeeming an existing mutual fund investment should also be declared in the ITR for filing tax on mutual fund dividends. Understand thoroughly how to declare mutual fund investment in ITR so that you can comply with the rules of filing ITR for mutual funds and avoid penalties. Also, file your return on time to fulfil your duty and carry forward your losses to subsequent financial years if you have any.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn how mutual funds are taxed and find out how to declare mutual funds while filing ITR. Explore the tax implications on mutual fund gains today!<\/p>\n","protected":false},"author":45,"featured_media":5659,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[8,1741],"tags":[963,965,964,306,305],"acf":[],"modified_by":"Aishika Banerjee","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/11\/6-1.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5656"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/45"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=5656"}],"version-history":[{"count":7,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5656\/revisions"}],"predecessor-version":[{"id":17213,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5656\/revisions\/17213"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/5659"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=5656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=5656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=5656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}