Data for the purchase of mutual funds is entered in form 26AS


MUMBAI: Can the tax office accept long-term capital gains tax return (LTCG) given by the AUM of mutual funds?

– Name withheld on request.

Assets under management or assets under management is an indicator of the performance of a mutual fund and its size. This is the total market value of the assets that a mutual fund manages at any given time.

Investments in mutual funds are generally managed by asset management companies (AMCs). These companies provide a detailed year-end report of transactions that have been entered into by a person as well as a summary of the capital gain or loss suffered by that unitholder. Although the data provided by these fund managers can be trusted, the calculations made by them to arrive at the figures for the gains or losses incurred should be carefully checked before filing the tax return. It is necessary to verify whether the provisions relating to acquired rights, indexation, etc. have been applied correctly or not. This practice is also prevalent throughout the industry.

The Income Tax Service has in the past accepted such returns from AMCs for capital gains verification purposes. In addition, at the individual level, it becomes very difficult to keep the details of the transaction and, therefore, such statements are a reliable source of information. Data for the purchase of mutual funds is also entered in Form 26AS based on records filed by these mutual fund managers with the income tax department.

– Response from Shailesh Kumar, Partner, Nangia & Co LLP. Send your questions to [email protected]

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