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.