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Income Tax Return 2019: File Taxes for ELSS Research Team | Posted On Wednesday, July 24,2019, 12:09 PM

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Income Tax Return 2019: File Taxes for ELSS



Paying your taxes? There’s good news. The Income Tax Return 2019 filing date has been extended to August 31st 2019. Yes, July 31st 2019 is not the last date to file taxes. It’s August 31st and you now have a month to file taxes.

While you don’t have to pay a penalty of Rs 1,000 to Rs 5,000 if you file taxes before August 31st 2019, don’t delay filing ITR.

Why is the income tax filing deadline extended? The tax department knows the problems faced by taxpayers and CA’s because of ITR form changes, the late issuance of Form 16 due to extension in Corporate TDS Return Filing deadline to June 30th 2019 and so on.

Want to know more on Tax Planning? We at will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Income Tax Return 2019: File Taxes for ELSS

What is ELSS?

Equity Linked Savings Scheme or ELSS is a tax saving mutual fund. It is an equity diversified mutual fund with most of the money invested in stocks. ELSS has a 3 year lock-in period.

You get tax deduction under Section 80C up to Rs 1.5 Lakhs a year on investing in ELSS. If you fall in the 30% income tax slab, invest in ELSS and save up to Rs 45,000 in tax.

See Also: 5 Simple Steps To File Income Tax Returns

Why ELSS is Excellent to Save Tax?

ELSS is a great way to save taxes. It’s an excellent long-term investment and some ELSS funds have even given 12-15% returns. ELSS enjoys Section 80C benefits and ELSS used to enjoy EEE benefits. (Exempt, Exempt, Exempt regime).

However, after Union Budget 2018, LTCG on equity/equity oriented funds in excess of Rs 1 Lakh is taxed at 10% with grandfathering. For equities LTCG is a year or more.

In spite of this, ELSS is still a tax-efficient investment. Salaried people must invest in ELSS for the long-term and save tax.

See Also: Document Checklist for Filing Income Tax Returns

File Taxes for Redeeming ELSS

Let’s say you have invested in ELSS and Equity Oriented Mutual Funds. You enjoyed the comfort of filing a simple ITR-1.

Now, let’s say you have redeemed the ELSS investment after 3 years. This redemption has been made last year. Now, you will have to go through a 26 page ITR-2 form while filing ITR.

If you redeem the ELSS after the compulsory 3 year lock-in, you get long term capital gains/long term capital losses. Redemption of equities/equity-oriented funds/ELSS made after a year from the date of investment is treated as LTCG.

If you take a look at ITR-2, you will see a new page 112 A. There is a 16-column table which shows LTCG from each transaction. This is from the sale of equity/equity-oriented mutual funds and also ELSS.

See Also: Income Tax Slabs & Income Tax Rates 2019

You and all tax assessee’s would have to fill 8 out of 16 columns. However, introduction of so many columns made tax filing difficult.

You would have to give sale and purchase price of each transaction. You would have to show each transaction, irrespective of profit or a loss. The Income Tax Department doesn’t know if it was a gain or a loss until you report it in the ITR.

This new ITR Form gives the option of either entering script-wise details of LTCG or the consolidated LTCG value in the pre-existing capital gain page.

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