ITR Filing 2025: Key Tax Tips for Investors in Shares and Mutual Funds
Learn how to report capital gains, dividends, and losses in your ITR correctly to save taxes and avoid scrutiny.
Income Tax Return 2025: Guide for Share and Mutual Fund Investors
ITR Filing 2025: Don’t Miss These Key Rules for Investors in Shares and Mutual Funds
If you invest in shares, mutual funds, or other market securities through a Demat account, filing your Income Tax Return (ITR) requires special care. Incorrect reporting of capital gains, dividend income, or Demat account details can lead to tax notices, penalties, or denial of tax benefits.
Here are the essential guidelines every investor should follow while filing ITR for FY 2024–25.
1. Report Capital Gains Accurately
♦ Equity shares / equity mutual funds:
→ Holding period less than 12 months → Short-Term Capital Gain (STCG) taxed at 20%
→ Holding period more than 12 months → Long-Term Capital Gain (LTCG), gains above ₹1.25 lakh taxed at 12.5%
♦ Debt mutual funds, gold, property:
→ 24-month holding rule determines short-term vs long-term status.
2. Dividend Income Is Taxable
Any dividend received from shares or mutual funds must be reported under “income from other sources.”
It is taxed as per your slab rate — and skipping this step may trigger discrepancies in your Annual Information Statement (AIS).
3. Disclose Capital Losses to Carry Forward
If you incur losses from investments:
♦ Report them in your ITR
♦ Carry forward for up to eight years to offset future capital gains — reducing future tax liability.
4. Verify Broker Statements with AIS
Before filing, match your broker’s consolidated statement and AIS data with your own records.
Any mismatch can trigger tax notices or scrutiny.
5. Adjust for Corporate Actions
Corporate events like bonus shares, stock splits, or rights issues affect the cost of acquisition used in capital gains calculations, even if they don’t have an immediate tax impact.
Incorrect computation here can inflate your tax liability.
6. Check TDS and Loan Interest Rules
♦ Tax Deducted at Source (TDS) on dividend or securities income must be claimed correctly in ITR.
♦ Interest on loans against securities is deductible only under business income, not under capital gains.
7. Report All Demat Accounts
If you have multiple Demat accounts, ensure all are disclosed.
The Income Tax Department already receives information from brokers and depositories, so omissions can lead to mismatches and inquiries.
8. Maintain Records for Six Years
Keep broker statements, contract notes, and dividend certificates safely stored.
These are crucial during scrutiny, disputes, or AIS mismatches.
