The change in long-term capital gain (LTCG) tax rule last year has made filling income tax return (ITR) difficult for salaried equity and mutual fund (MF) investors as they can no longer use the ITR-1 Sahaj form to file their return if they have sold or redeemed any share or fund.
So, in case you have redeemed a portion of your equity-linked savings scheme (ELSS) in which you invested to avail 80C benefits last year, you have to use ITR-2 form, instead of ITR-1, to file your income tax return even if you are not a director of any company and your annual income is less than Rs 50 lakh.
Similarly, if you have made any intra-day trade or have sold some of your equity shares or redeemed some of mutual fund units, you have to file ITR-2 through MS Excel or Java utilities and can’t fill the ITR data on the incometaxindiaefiling.gov.in site that you used to do to while filing the ITR-1 form.
However, the only respite for salaried persons having investments in equity and MFs is dividend income up to Rs 10 lakh, provided they have not sold or redeemed any such investments.
So, a salaried individual having dividend income may still use the ITR-1 form to file his/her tax return subject to the following conditions:
- Total dividend received during the year should not exceed Rs 10 lakh.
- Dividend Distribution Tax (DDT) has been paid by the company or AMC before distributing the dividend.
- There were no redemption of equity or MF investments during the year.
- No investment is made in equity shares of an unlisted company.
- Doesn’t have agricultural income of more than Rs 5,000.
- Doesn’t have more than one house property.
- Total income from salary, one house property and other sources (like interest income, family pension) doesn’t exceed Rs 50 lakh.
- Doesn’t have income from any other sources other than salary, one house property and interest income, family pension.