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AIS CAPITAL GAIN

02 November 2021

The AIS shows a capital gain of mutual funds as the fund issued new units after swapping from one scheme to another scheme.Although the money remains invested and not received by the assessee.Should this gain be considered while filing itr?

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5 Replies

CA Aakarsh Jain (CA) (10431 Points)
Replied 02 November 2021

Yes this gain is to be considered while filing ITR because this is treated as transfer in Capital Gains. And when you sale those new units, the cost will be the value at which the old fund is swapped into the new one.

Please like my reply if you are satisfied with it, so that I'll be motivated to answer more.

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krishna patil (110 Points)
Replied 02 November 2021

Yes thank you very much

CA Aakarsh Jain (CA) (10431 Points)
Replied 02 November 2021

Welcome 😄

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Rammohan (NA) (255 Points)
Replied 03 November 2021

It is not clear if the swap was done by the MF itself as a part of the process of consolidation of two or more funds of the same category.

In case the consolidation was done by the MF on its own, then, it would appear that u/s 47(xviii) and (xix) of the I-T Act, such a swap is not considered as a transfer for purposes of Sec 45, from 1.4.2016.

In this regard, please also read the clarifications given in certain newspapers as under:

https://economictimes.indiatimes.com/wealth/tax/how-to-calculate-long-term-capital-gains-on-equity-mutual-funds-after-re-categorisation/articleshow/63909130.cms?from=mdr

https://www.financialexpress.com/money/income-tax/your-queries-income-tax-switch-from-dividend-to-growth-option-in-mf-is-a-taxable-transfer/2285150/

I request experts to comment on this answer. Thank you.