new Delhi. In the Kovid-19 epidemic, along with the stock market, the returns of mutual funds were also under pressure. The worst hit was on equity mutual funds, where investors have made frequent withdrawals fearing losses.
If you have also sold your mutual funds due to the need of money in financial crisis and during this time you have suffered a loss due to not getting the desired return, then you can compensate it in the form of tax exemption. Significantly, during the pandemic, investment in equity mutual funds had declined by 95%.
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You will get tax exemption like this
Sandeep Jain, Investment Advisor, TradeSwift, says that the tax on earnings in equity mutual funds is calculated on short term or long term basis. If the investor has suffered a loss in equity mutual funds in any year, then for the next 8 years, it can be compensated while filing tax.
Learn Tax Exemption Maths
If someone has a loss of Rs 1,00,000 from mutual funds in the year 2020 and a profit of Rs 20 thousand in the same segment in the next year, then this amount will be adjusted against the previous loss at the time of income tax return and his tax liability is zero. Will happen. Similarly, year after year, the profit will be adjusted against the loss till the full amount of the loss is equalized. If, in 2021 itself, the investor earns a profit of 1.5 lakhs from the mutual fund, then his tax liability will be only on 50 thousand rupees, because the loss of 1 lakh rupees will be adjusted.
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Double opportunity on short term losses
Short term capital gains (STCG) tax, which is levied at 15%, if invested in equity mutual funds for a period of less than 12 months. The short term loss is called short term capital loss (STCL) and long term LTCL. If the investor has incurred a loss on STCL in any financial year, then its adjustment can be made on both short term and long term investments for the next 8 financial years. At the same time, adjustment of LTCL can be done only on long term investments.
Investors must keep this in mind
AK Nigam, director, BPN Fincap Consultant, says that filing of income tax return is very important for adjusting the loss in mutual funds in the next financial year. If the investor does not show his loss in the return of the year in which the loss has occurred, then there will be no chance of adjusting it with future earnings.
Tags: income tax, Investment tips, mutual fund
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