Following the introduction of Section 112A, once the long-term capital gain (LTCG) on equity has become taxable, in addition to paying a 10 percent tax on those gains over Rs 1 lakh in one fiscal year filing the income tax return (ITR) became a headache for equity and equity-focused mutual fund investors.
Since page 112A of the ITR forms (except ITR 1 and ITR 4) requires investment details for each redemption, filing the return of income has become a daunting task for investors investing especially through the SIP channel. (systematic investment plan).
Indeed, in the event that an investor with a monthly SIP in 10 equity-focused FCP programs over the past 11 years redeems all the investments of a financial year, with the exception of the investments of the last year, the investment gains of the previous 10 years, ie 120 installments for each fund and a total of 1200 installments for the 10 funds – will become LTCG.
Thus, when filing the tax return, the investor must make entries in at least seven columns on the 1,200 rows on page 112A of the qualifying ITR form.
Taxpayers have two options for entering details when filing the return online: either by entering the details one by one by selecting the ‘Add more’ option and saving each entry, or by downloading the spreadsheet. Annex 112A in CSV format.
Getting dividends as regular income? You must beware! You have to pay taxes and reveal them in ITR this year
While completing the downloaded Schedule 112A worksheet in CSV format and downloading it is easier and faster, it is not compatible with MS Office 2007 and earlier versions.
So paying 10 percent tax on gains over Rs 1 lakh made on repurchasing shares, share-based programs in a fiscal year are not enough, these investors have to work with the schedule 112A to make each entry when filing their tax return or must update their software to make it compatible with RTI format in order to use the Schedule 112A worksheet in CSV format.