While traveling in the woods, I met a monk who enlightened me with his words of wisdom about happiness. Happiness is of two forms. The first one is the internal happiness which you gain from charity and other social cause. The other one is the external happiness which you gain from spending money. He told me you can’t get both kinds of happiness at the same time. Well, the monk hasn’t met the older monk yet. Politely, I bowed my head and whispered, “I am sure you aren’t aware of the concept of Income Tax”.
Allow me to get to the point, how to file an ITR?
To be honest, ITR filing is quite a cumbersome task. But we have got a specialty in making life simpler for our customers. Just be with me and follow the steps.
To file ITR, you will need the form. To get form, you will need to visit https://incometaxindiaefiling.com. There you will find 7 ITR forms. If you are a salaried person and have not had any capital gains, then ITR Form 1 is the option for you. But if you are a salaried person or a HUF(Hindu Undivided Family) with the capital gain or loss, you will need to choose ITR Form 2.
Wondering what capital gains are? The extra gain which you have received from your mutual funds is capital gains. The tax is supposed to be paid on realized capital gains during the financial year. Rules for taxation on capital gains is different for debt mutual fund and equity mutual fund. The capital gains can be short term or long term depending upon the period after which the mutual fund is redeemed.
Mutual funds scheme also provides the dividend to investors. Dividend received is also subject to taxation based on certain conditions. Dividend received up to Rs.10 lakhs is tax-free and dividend earning of most of the retail investor falls under this category.
There are some things which must be taken into consideration. Tax is calculated for funds in your portfolio, which you have redeemed. For long-term capital gains, the tax is payable capital gains if the amount is above 1 lakhs. If you are looking for tax deductions, only ELSS schemes and pension schemes of funds can be shown under Section 80C up to a maximum of Rs.1.50,000.
This is all a smart investor must be aware of.
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