Doubt on Mutual Fund withdrawal and STCG & LTCG?

Q & A Forum › Category: Mutual Funds › Doubt on Mutual Fund withdrawal and STCG & LTCG?

shanmukh asked 9 years ago

hi.... sree.... really an informative blog from you and i following it from few months....i have a small doubt about mutual fund.let us say...i invested in some balanced fund from march 2016 to aug 2017 in SIP form or lumpsum(+reinvestment in same folio no)..... if i want withdraw from the fund in aug 2017 Case 1: SIP i have any STCG for aug 2017 ? (because not all the installments crossed 1 year to get exemption under capital gains(equity funds)) Case 2 : lumpsum(+ reinvestment in same folio no) can i have STCG for aug 2017?( my lumpsum may cross 1 year but not the reinvestment in the fund under same folio no) i hope you got my point.. kindly elaborate..... thanks...

7 Answers

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Sreekanth Staff answered 9 years ago

Hi,
Thank you for following my Blog posts :)
Case 1 : If you redeem all units of your Equity balanced fund in Aug 2017, you may get both STCG & LTCG depending on the holding period. Some units would have crossed 12 months and other remaining units would have been held for less than 12 months.
For example : March 2016 SIP units if held till Aug 2017, these fall under LTCG (if any) category.
July 2017 SIP units if redeemed in Aug 2017, you may realize STCG on this redemption.
Case 2 : Yes, if you have made lump sum investment in March 2016, it falls under LTCG category. Re-investment? Do you mean by additional investments or Dividend reinvestment?
Suggested reading:
MF Taxation rules.

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shanmukh answered 9 years ago

thanks...
its reinvestment .....for case 2....
one more the sips to DSP BLACKROCK MICRO CAP FUND STOPPED..WHY ITS HAPPENED....ANY SUGGESTION FOR ALTERNATIVE SIP REPLACE OF DSP FUND....

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Sreekanth Staff answered 9 years ago

Hi, If you have an active (existing) SIP with DSP micro fund, sips will be accepted. But can't set up new SIP now. This can be a temporary strategy followed by the Fund manager. Alternative fund can be Franklin Smaller Companies Fund.

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samjam0071 answered 9 years ago

Dear Sir, My wife had made a redemption of Equity mutual fund where STCG came to Rs. 68/- and LTCG came to Rs. 5453/-. Now, since 15% tax is applicable on STCG, the tax amount on Rs. 68 comes to Rs. 10.20 only/-. Should she pay that Rs. 10/- or 11/- via IT challans on IT website and then accordingly file return or there is no need to pay that as the amount is minuscule. She has not declared Rs. 68/- in income from other souces in Form 16. Kindly advise should we pay and then file return accordngly or no need for that due to minuscule amount? Regards, Samant

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Sreekanth Staff answered 9 years ago

Dear Samant,
Is her income below basic exemption limit?
If her total taxable income excluding short term gains is less than the minimum income which is chargeable to tax (Rs 2,50,000 for financial year 2016-17) – you can adjust this shortfall against your short term gains.
(Next time, kindly post your queries as in a new thread - New question).

By the by STCG is not 'income from other sources', it has to be shown under the head 'Capital Gains'.

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samjam0071 answered 9 years ago

Dear Sir, Thanks for your reply. Her income as per Form 16 is Rs. 329750 and Rs. 3064 has been deducted as income tax by employer. Hence, kindly suggest if she still needs to pay Rs. 11/- as STCG tax even though this amount is minuscule. If yes, then which IT challan has to be filled and what is the procedure? If paid, where this amount has to be shown in ITR and which ITR has to be filled? Regards, Samant

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Sreekanth Staff answered 9 years ago

Hi, Considering the fact that she has to file her income tax return. It is advisable to disclose the STCG. You need to provide these details under the head 'Capital Gains' (Schedule CG). Kindly read : https://www.relakhs.com/new-itr-forms-ay-2017-18-fy-2016-17/