Reporting Capital Gains/Losses from ETF Funds and Information on Form 10-IEA

Income Tax
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Hi @TeamQuicko

  1. I have a short term loss of just Rs. 116 from “NIPPON INDIA ETF LIQUID BEES” before 23rd July, 2024. No dividend received. My tax report shows it along with other short term trades and this loss is adjusted in overall STCG.
    However in AIS, it is reported under SFT-17-OTU(M) - Sale of other unit (Depository). Security Name - NIPPON INDIA MF-NIPPON INDIA ETF NIFTY 1D RATE LIQUID BEES.
    So, can I report it along with other normal STCG occuring before 23rd July ? Or do I have to report it separately where debt mutual funds are shown under “From sale of Assets other than at A1,A2,A3,A4 or A5” ?

Also, can you please tell me the following -

  1. If I file ITR-3 this year under Old Regime by filing Form 10-IEA for the first time, can I comeback to New Regime next year by filing 10-IEA again ? And Do I have to file 10-IEA again to comeback even if next year I file ITR-2 instead of ITR-3 ?

  2. My STCG expenses excluding STT is about Rs.1000. But can I show expenses as 0 (zero) in ITR ? It will simplify my calculations and my tax liability is zero anyway.

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Hi @Kaustav_M,

Your short-term loss from NIPPON INDIA ETF LIQUID BEES, should be reported under “From sale of assets other than A1–A5" in your ITR. Even though your broker includes it in overall STCG, debt mutual funds are treated separately, so don’t mix it with normal equity STCG.

Regarding Form 10-IEA, it applies only to ITR‑3 and ITR‑4 filers; others can switch every year without filing Form 10‑IEA. Also, you can switch back to the new regime later but there’s a catch. If you have business/professional income, you can only switch twice in your lifetime:

  1. Once to move from new → old regime
  2. Once to move back from old → new regime

After that, you’re locked in unless your income type changes and you no longer have business/professional income.

Sharing the rules to file Form 10-IEA for your reference:

Rules to file Form 10-IEA for switching tax regimes
Rules to file Form 10-IEA for switching tax regimes1340×449 168 KB

And yes, you can show expenses as zero in your ITR. Since your tax liability is already zero, reporting the Rs. 1,000 won’t affect your final tax.

Hope this helps!

2 Likes
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Thank You @Diti_Savalia