How to quickly insert LTCG information on several SIP transactions

How to quickly insert LTCG information on several SIP transactions

Making long-term investments in equities through Systematic Investment Plans (SIPs) in equity mutual funds (MFs) is considered a substantially less-risky option. However, once they have redeemed their assets, they are faced with the difficult chore of inputting investment-by-investment information of long-term capital gain (LTCG) in their Income Tax Return (ITR).

Capital gains come from the redemption, changeover, or change of plan of such MF units. Short-term capital gain (STCG) or loss results from transactions in equity MF units made within one year of the date of investment, whereas long-term capital gain (LTCG) or loss results from transactions made after one year of the date of investment.

Taxpayers investing in ELSS (equity-linked saving plan) and other equity-oriented schemes had no trouble filing their ITRs while the LTCG on transactions in equity MFs was tax-free.

However, since the LTCG on equities became taxable, such investors have found it difficult to file their tax returns, especially if they invest through the SIP route.

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While the declaration of STCG on stocks and equity-oriented MF schemes has remained unchanged, ITR Forms (excluding ITR 1 and ITR 4) now include a separate page called 112A for filling out details about LTCG on equities and equity-oriented MF schemes.

In the 112A page, equity investors must submit investment-by-investment details of stock and/or unit redemptions in equity MF schemes that result in LTCG.

As a result, even salaried investors who redeem their ELSS or other equity-oriented plan investments will not be able to utilise ITR 1.

Furthermore, the entry methods for investments made on or before January 31, 2018 and those made after that date will be different.

The 112A page can be filled in one of two ways: by downloading the CSV spreadsheet, filling it out, and uploading it, or by manually entering each entry in the page.

While typing hundreds of entries in the CSV spreadsheet and uploading them may be a faster means of filling the page, the compatibility and precision with which the fields are filled often results in the sheet being rejected at the time of uploading.

As a result, instead of utilizing the CSV spreadsheet, it may be easier to enter individual facts linked to lump sum investment redemption on the page.

For MF clients who invest through the SIP route, however, entering investment-by-investment details for each program for each month takes time and patience.

Investors may group the data of investments made before and after January 31, 2018 separately for each plan that is redeemed on the same day to limit the number of entries and save time.

‘Cost of acquisition,’ ‘Full Value of Consideration,’ and ‘Expenditure entirely and exclusively in connection with transfer’ must all be entered for investments made after January 31, 2018.

What happens if you don’t file your ITR by December 31, 2021?

‘ISIN Code’, ‘Name of the Share/Unit’ (which will be automatically taken by the system), ‘No. of Shares/Units’, ‘Sale-price per Share/Unit’, ‘Cost of acquisition’, ‘Fair Market Value per share/unit as of 31st January, 2018’, and ‘Expenditure wholly and exclusively in connection with transfer’ are the entries to be made in the 112A page for investments made The ‘Full Value of Consideration’ is calculated by multiplying the number of shares/units by the sale price per share/unit.

The only variable input installment-wise for the same equity-oriented MF scheme units acquired through SIP on or before January 31, 2018 and redeemed on the same date is the number of units, which varies with the date of investment as markets fluctuate.

The cost of acquisition will be the same for each instalment because the SIP amount is fixed for each instalment. As a result, the total cost of acquisition for a certain number of SIP instalments redeemed on the same day can be calculated by multiplying the SIP amount by the number of instalments. For example, the total cost of buying will be Rs 10 lakh if 100 instalments are paid on or before January 31, 2018, with a SIP amount of Rs 10,000.

Because the sale-price per unit remains the same for the particular scheme on the same day of redemption, the total number of units redeemed on that day can be calculated by adding the units against the 100 SIPs and entering as a single transaction. As of January 31, 2018, the ISIN Code and the Fair Market Value per share/unit will remain unchanged.

To save time, instead of making 100 entries for the units of the same equity-oriented MF scheme acquired on or before January 31, 2018 and redeemed on the same date, a single entry for the units of the same equity-oriented MF scheme acquired on or before January 31, 2018 and redeemed on the same date may be made.

Have you submitted your tax returns? Here’s how to use Aadhaar OTP to e-Verify your ITR.

Have you submitted your tax returns? Here’s how to use Aadhaar OTP to e-Verify your ITR.

Every person who earns money is obliged to file an Income Tax Return (ITR), which is a form that reports their annual earnings to the IRS. The form can be used by you or any other taxpayer to report your income, expenses, tax deductions, and investments, among other things. The time for filing AY 2021-22 Income Tax Returns (ITR) is coming, and those who have not yet done so should be advised that the deadline is December 31, 2021. There are two methods for submitting IT: offline and online. The Internal Revenue Service allows you to file your tax return electronically (e-filing).

You must e-verify the ITR after it has been filed to complete the return filing procedure. An ITR is considered invalid by the IRS if it is not confirmed within the timeframe specified. e-Verification is the most convenient and time-saving method of validating your ITR. The e-Verify function is available to both registered and non-registered users on the e-Filing site.

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You can use one of several methods to e-Verify your tax return. For e-Verification, you can use a Digital Signature Certificate, an Aadhaar OTP, an Electronic Verification Code (using a bank account or a demat account), an Electronic Verification Code (using a bank ATM – offline mode), or Net Banking.

Make sure your cell phone is linked to Aadhaar if you want to e-verify your ITR using Aadhaar OTP after you’ve already filed it. Also, double-check that your PAN is linked to your Aadhaar number.

Know why ITR reporting deadline for FY 2020-21 may be extended to December 31

How to use Aadhaar OTP to e-verify ITR:

Step 1: Visit https://www.incometax.gov.in to access your e-filing account

Step 2: Select the e-Verify Return option from the quick links menu.

Step 3: On the e-Verify screen, select I’d like to verify using an OTP sent to an Aadhaar-registered cellphone number and click Continue.

Step 4: On the Aadhaar OTP screen, check the box next to I agree to confirm my Aadhaar Details, then click Generate Aadhaar OTP.

Step 5: After entering the 6-digit OTP received to your Aadhaar-registered cellphone number, click Validate.

Step 6: It’s important to remember that the OTP is only good for 15 minutes. You’ll have three chances to type in the right OTP. An OTP expiry countdown counter will appear on the screen, notifying you when the OTP will expire. When you click Resend OTP, a new OTP will be produced and sent.

Step 7: You’ll see a page with a success message and a Transaction ID. Please keep the Transaction ID on hand in case you need it again. You will also receive a confirmation message to the email address and phone number you supplied on the e-Filing portal.

What happens if you don’t file your ITR by December 31, 2021?

What happens if you don’t file your ITR by December 31, 2021?

The deadline for filing the Income Tax Return (ITR) for the financial year 2020-2021, i.e. assessment year 2021-2022, for the general category of all taxpayers whose accounts are not required to be audited and which covers all salaried is usually 31st July each year, but it has now been extended until 31st December 2021. What happens if an individual taxpayer whose accounts aren’t subject to audit misses the deadline and fails to file his ITR for the assessment year 2021-2022 by December 31, 2021? Let’s talk about it.

Is the due date also the ITR’s last date of filing?

The common misconception is that the due date is also the deadline after which you cannot file your ITR, which is incorrect. There are two dates that are important for ITR filing: the due date and the last date. If you miss the deadline, you still have until the end of the year to file your ITR. For those taxpayers whose accounts are not required to be audited, the due date for filing ITR for each year is 31st July of the year after the year for which the ITR is to be filed, and the last date, as per the modified law, is 31st December of the following year. For the fiscal year 2020-21, the due dates and deadlines for filing ITRs for such taxpayers have been extended to December 31, 2021, and March 31, 2022, respectively.

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What if you don’t meet the deadline?

If you miss the extended due date of December 31, 2021, you can still submit your current ITR by March 31, 2022, but you will lose your right to carry over any losses from the current year that cannot be offset against current year’s revenue. So, if you have losses under the headings of business income, capital gains, or losses exceeding two lakhs rupees under the house property heading during the current year that you would otherwise be able to carry forward for set off in subsequent years, you won’t be able to do so if you miss the deadline of December 31, 2021.

If the taxes paid by you or on your behalf exceed your tax liability and you are entitled to a refund, you forfeit your claim to interest on the excess taxes paid for the period of delay that is attributable to you. If the taxes paid by you or on your behalf are less than your total tax liability, you will be required to pay interest for the time of delay in filing your ITR, even if you have already paid the deficit after March 31, 2021.

Late payment for filing your ITR after the deadline

In addition to the aforementioned repercussions, if you file your ITR beyond the due date and your taxable income exceeds five lakhs, you will be required to pay a flat late charge of five thousand rupees at the time of filing. If the taxable income is less than Rs. five lakhs, the late fee is limited to Rs. 1,000/-.

Frequent Errors That Taxpayers Should Avoid While Preparing Tax Returns.

So, if you’re compelled to file your ITR for any reason, even though you don’t owe any taxes, you’ll have to pay a one-thousand-rupee late fee. This can happen if your gross total income exceeds the basic exemption ceiling but does not exceed five lakhs, and no tax is required due to the refund provided under Section 87A. This can also happen if you need to file an ITR because you own assets outside of India, are a signatory to an account outside of India, or have spent more than the prescribed threshold limit on energy or overseas travel.

What happens if you miss the deadline for submitting your ITR?

If you fail to file your ITR by the extended due date, which is March 31, 2022, Income tax department can levy a minimum penalty of up to 50% of the tax that you could have avoided by not filing the ITR, in addition to your income tax and interest liability until the date you file your ITR in response to the tax department’s notices.

Only a few individuals are aware that if you do not file your ITR by the deadline, the government has the authority to prosecute you and imprison you. The current income tax laws stipulate a three-year minimum term and a seven-year maximum punishment. The government does not have the authority to prosecute you for every incident of failing to file an ITR. Only if the amount of tax sought to be avoided exceeds Rs. 10,000/- can the income department bring a case.