How to File Capital Gains Tax?

The Indian tax system offers a ton of benefits. But navigating it can often be complicated, especially when it comes to capital gains. 

Whether you've profited from selling property, stocks, or other capital assets, it is crucial to understand the process of filing taxes and the capital gains ITR form to use. This will help you ensure compliance with the law and fulfill your tax responsibilities efficiently.

Before diving into the process, let's understand how to select the right capital gains ITR form.

ITR form for capital gain

If I have capital gains, which ITR to file? This is a common question most taxpayers have. Depending on your status and income, you can file taxes using three capital gains ITR forms:

ITR-2: This is a dedicated ITR for salaried persons with capital gains. It also includes Hindu Undivided Family (HUF) with capital gains income. However, the ITR 2 capital gains form does not include income from business or profession.

ITR-3: Individuals or HUFs can use this form to file ITR for capital gains and business income.

ITR-4: If you are an individual or HUF with income from capital gains and fall under presumptive tax schemes, you can use this ITR form for capital gains taxation. It includes all firms except LLPs.

Steps to fill a capital gains ITR form

Visit the official website of the IT department and follow these steps to file your capital gains tax:

Step 1: Log in to your account with your credentials. If you're a new user, click 'Register' to set up your account.

Step 2: Select e-File> Income Tax Returns> File Income Tax Returns. 

Step 3: Select 2022-23 as your assessment year and 'Online' as the mode of filing. Now, click on continue.

Step 4: Select your status and the suitable ITR form and click 'Proceed.'

Step 5: The next page will have five types of schedules. Select 'General' and 'Income schedule.' Now, click on 'Schedule capital gains' and select the type of asset from the list.

Step 6: To fill out the short-term capital gains ITR form, click 'Add details' and enter the consolidated sale amount along with the Cost of Acquisition (COA) in a particular fiscal year. But if you're wondering how to file long-term capital gains in ITR 2, click 'Schedule 112A' and enter details like the transaction date, purchase and sale price, ISIN, etc. Now, click on 'Add.'

Step 7: Review Part B TTI after confirming the appropriate schedule and click on 'Preview return.'

Step 8: Download the ITR and open the declaration tab.

Step 9: Provide the required details and click 'Proceed to validation.'

Step 10: Once your ITR is validated, you must verify it within 30 days. You can do this online or by sending a signed copy of the ITR-V (acknowledgment form) to the IT department's office in Bangalore.

Wrapping Up

Filling out the capital gains ITR form might seem daunting. But by following the right steps, you can ensure a smooth and hassle-free experience. Learn all about investments and related taxation with Tata Capital Moneyfy website or download the Moneyfy App now!