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I would like to know under which section of I.T. Act are debt mutual funds taxed. Specific information required as follows: 1. Long term capital gains @20% after indexation under which Sec. of I.T. Act? 2. In ITR, in which sheet and under which column are the details to be provided? Kindly advice at the earliest.

I ] The provisions of Long Term Capital Gain (LTCG) Tax as per section 112 and the provisions requiring indexation are as per section 48 of the Income Tax Act,1956 .The relevant extract of the section is mentioned below :

Section 112(1) (a)

Where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head "Capital gains", the tax payable by the assessee on the total income shall be the aggregate of :-

(a) In the case of an individual or a Hindu undivided family, being a resident -

(i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and

(ii) The amount of income-tax calculated on such long-term capital gains at the rate of twenty percent:

As per section 48

The income chargeable under the head "Capital gains" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely :-

(i) Expenditure incurred wholly and exclusively in connection with such transfer;

(ii) The cost of acquisition of the asset and the cost of any improvement thereto:

Provided that the long-term capital gain arises from the transfer of a long-term capital asset, other than capital gain arising to a non-resident from the transfer of shares in, or debentures of, an Indian company referred to in the first proviso, the provisions of clause (ii) shall have effect as if for the words "cost of acquisition" and "cost of any improvement", the words "indexed cost of acquisition" and "indexed cost of any improvement" had respectively been substituted.

Capital gains arising from the transfer of a long-term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust referred to in section 112A have been excluded from the applicability of the above mentioned proviso.

Since debt mutual funds are not an equity oriented fund or a unit of a business, trusts indexation provisions will be applicable. Hence, the rate of LTCG tax @ 20 % will be applicable for debt mutual funds.

To answer your second query, the Income Tax Return applicable to Individuals and HUF’s for filing the details of Long Term Capital Gain (LTCG) is ITR 2.

The sale amount should be disclosed under ‘CG sheet in Point B9 (a)(ii), cost of acquisition with indexation in B9 (b)(i) and long term capital gain on assets of B above will be reflected in B9 (e).

Advise you to further confirm/clarify the same with your Tax Consultant as well.


Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Please visit - to read Scheme Specific Risk Factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the scheme's objective will be achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.