• Notification Date: 07-01-2022
• Notification No:

Long-term Profits on Gilt Funds if Held over a Year

Huge and long-term gains have been assured for listed debt funds. They are required to be held for more than a year. In that case, these debt funds will be identified as long-term profits, otherwise, they will be considered as short-term.

RBI has recently opened a gilt securities market for the retail investors. The NCDs which have been sold after a year will be considered as long-term ones.

“Now that RBI has opened a gilt securities market for retail investors and NCDs sold after one year are categorized under LTCG, will the same rule apply for G-sec trading also? What will the capital gain category for gilt securities sold after one year?” – Dinesh Goyal

Gilt funds are those debt funds that have been invested in bonds. The state and central governments issue fixed interest-bearing securities in return. If these listed debt funds are held for a long time, for over a year, then the gains are recognized as long-term. If they are held for a period shorter than one year then they are considered as a short-term profit. On the other hand, the gains acquired from the unlisted debt funds will be recognized as long-term gains if the same is held for a span of more than a period of 36 months.

“I filed my ITR1 for AY 2021-22 on 30.09.21 and got an intimation under section 143(1) on 21.10.21. Now for the TDS mismatch, I have to file a rectification request. But under the rectification menu, I find no option to file the same. Rectification can only be done till AY 2020-21. What can I do?” – Gopal Chandra Patra

You are requested to wait for a short period since a new provision is required to be made for the purpose. At present, the rectification provision is only available for limited orders. The rectification is applicable only for those orders that have been passed by CPC u/s 143(1) read with 154 till Assessment Year 2020-21. This facility is not available for the other orders by the Assessing Officers. The request for rectification is not even applicable for Appellate Orders. The rectification requests will be accepted from the taxpayers only in a few cases. They can submit a rectification request for return reprocess purposes. They can do the same for additional information for 243C interest and return data collection purposes through offline mode for Assessment Year 2020-21. It has been specified under the “New Request” tab of Rectification in the “Services” option, that there will be other options available under Rectification Requests after a short while. So, you have to wait till such a new provision is made available.

“My annual income is Rs 3 lakh, which is from my savings and FDs which is originally from my parents who are now no more. Will I face any trouble if I do not submit ITR in the future? - Arindam Chaudhuri

A person has to mandatorily furnish their return of income if their gross total income crosses the basic exemption limit in a financial year. For an individual under 60 years, the exemption limit is Rs 2.5 lakh for AY 2021-22. The annual income, as you have mentioned, exceeds 2.5 lakh. Hence, it is compulsory to furnish your ITR. Also, you will have the benefit of a 100% rebate of income tax up to Rs 12,500 since your annual income is under Rs 5 lakh under Section 87A.