Legal Reference
Schedule CG in ITR, Section 112A (equity LTCG), Section 111A (equity STCG), Section 112 (debt/other LTCG/STCG), ITA 2025 | FIFO method for SIP | Fund Capital Gains Statement essential
1. Schedule CG in ITR
Capital Gains from mutual funds, shares, property, and other assets are reported in Schedule CG (Capital Gains) of the ITR. For ITR-2 and ITR-3, Schedule CG requires detailed information for each type of capital gain — equity LTCG, equity STCG, debt LTCG, debt STCG, and other asset gains. The schedule automatically applies the correct tax rate based on the type of gain entered.
2. Capital Gains Statement from AMC/Broker
Every mutual fund investor who redeems units must obtain a Capital Gains Statement from:
- The AMC (Asset Management Company) directly from their portal
- The broker platform (Zerodha, Groww, CAMS, KFintech)
- CAMS and KFintech provide consolidated statements across all AMCs on their respective portals
The Capital Gains Statement shows each redemption with: units sold, acquisition date (FIFO), cost, sale consideration, gain/loss type (LTCG/STCG), and tax basis. Always use this statement for ITR Schedule CG — do not compute manually.
3. Aggregating Gains for Schedule CG
Schedule CG requires separate aggregation:
- 112A gains: All equity fund LTCG — enter total LTCG from all equity funds; Rs 1.25L exemption applied once on aggregate
- 111A gains: All equity fund STCG — enter aggregate STCG; no exemption
- Debt/other STCG: All debt fund gains and non-equity fund gains — entered in appropriate sections
- Property gains: separate computation with index/no-index choice
4. SIP FIFO: Detailed Example
Illustrative only. A monthly SIP of Rs 5,000 started in April 2023. In June 2026, 60 units are redeemed. FIFO applies: units bought in April 2023 are redeemed first. Units from April 2023 to May 2025 (25 months) have been held more than 12 months — these generate LTCG. Units from June 2025 to June 2026 (12 months) have been held exactly 12 months — check exact dates. The Capital Gains Statement automatically applies FIFO and segregates LTCG/STCG.
5. Switch Transactions
Switching from one fund to another (or from direct to regular plan) is treated as: redemption of the original fund (capital gains arise) and fresh purchase of the new fund (new holding period starts). The switch is a taxable event — even if no money leaves the investment. The Capital Gains Statement from the AMC should capture switches as redemptions.
6. STP (Systematic Transfer Plan)
An STP moves fixed amounts from one fund to another periodically. Each STP transfer is a redemption from the source fund (FIFO, capital gains arise) and a fresh purchase in the destination fund. Regular STP investors can accumulate many small capital gain events throughout the year. The annual Capital Gains Statement captures all these transfers as separate redemption transactions.
7. Why TaxClue
Mutual fund capital gains with SIPs, switches, and STPs create dozens of tax events that must be individually reported. TaxClue downloads Capital Gains Statements, aggregates them, and populates Schedule CG accurately. Contact us under ITA 2025.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.
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❓ Frequently Asked Questions
Where do I report mutual fund capital gains in ITR?
Mutual fund capital gains are reported in Schedule CG (Capital Gains) of ITR-2 or ITR-3. Equity fund LTCG (held 12+ months) go under Section 112A with the aggregate gain; Rs 1.25 lakh exemption is applied once on the total. Equity fund STCG (held under 12 months) go under Section 111A. Debt fund gains (all now taxed at slab rate from 2023) go under the appropriate short-term section. Always use the Capital Gains Statement from CAMS, KFintech, or the AMC portal.
Where can I get a Capital Gains Statement?
Capital Gains Statements can be obtained from: (1) CAMS portal (camsoline.com) — provides consolidated statement for all CAMS-serviced AMCs; (2) KFintech portal — provides consolidated statement for KFintech-serviced AMCs; (3) Individual AMC portals (HDFC MF, SBI MF, Axis MF etc.); (4) Broker platforms like Zerodha, Groww, Paytm Money. Download the statement for the full Tax Year (April to March) before filing ITR. Never compute capital gains manually for SIPs.
Is switching between mutual funds taxable?
Yes. Switching from one mutual fund to another — including within the same AMC (from regular to direct plan, from growth to IDCW, from one scheme to another) — is treated as a redemption of the source fund and a fresh purchase of the destination fund. Capital gains arise on the 'redemption' side. A new holding period starts for the 'purchase' side. The switch transaction appears in the Capital Gains Statement as a redemption.
How does FIFO work for SIP redemptions?
When you redeem SIP units, the FIFO method applies — units bought first are sold first. Units from early SIP instalments may be over 12 months old (LTCG) while recent instalments may be under 12 months (STCG). The Capital Gains Statement from the AMC or broker applies FIFO automatically and correctly segregates gains into LTCG and STCG for each lot. Attempting to compute FIFO manually for hundreds of SIP instalments is error-prone — always use the official statement.
Is STP (Systematic Transfer Plan) taxable?
Yes. Each STP transfer is a redemption from the source fund followed by a fresh purchase in the destination fund. Capital gains arise on each STP redemption, calculated on FIFO basis. If the source fund is an equity fund and units were held more than 12 months, the gains are LTCG at 12.5%. Frequent STP events throughout the year can create multiple small capital gain transactions. The Capital Gains Statement from the AMC captures all STP events as individual redemptions.
