How to report mutual fund gains and IDCW in your income tax return
Every redemption and switch in the year belongs in your return, even when no tax is due on it.
Updated 23 Oct 2026 · 3 min read
Get the figures
Download a capital gains statement for the financial year. It lists every redemption and switch with the purchase date, cost, sale value and whether each gain is short-term or long-term.
- CAMS and KFintech each issue one for the fund houses they serve.
- MF Central issues one covering both.
- Each fund house can issue one for its own funds.
How to download a capital gains statement has the steps.
Check your Annual Information Statement
The Annual Information Statement (AIS) on the Income Tax Department's e-filing portal lists the mutual fund sales, IDCW and TDS that fund houses and registrars have reported against your PAN. Compare it with your capital gains statement before you file. If an entry is wrong, you can give feedback on it in the AIS. The department may ask about any difference between your return and the AIS.
Which form
- ITR-1 and ITR-4 can be used if your only capital gains are long-term gains of up to ₹1.25 lakh in the year on equity-oriented funds and listed shares, and you meet the form's other conditions. These forms have allowed such gains since assessment year 2025-26.
- ITR-2 (no business income) or ITR-3 (business or professional income) is needed for any other capital gains: short-term gains, debt fund gains, long-term equity gains above ₹1.25 lakh, or losses to carry forward.
The capital gains schedule
In ITR-2 and ITR-3, capital gains go in the capital gains schedule, split by kind of gain:
- Long-term gains on equity-oriented funds are entered fund by fund or as a total, depending on what that year's form allows. The form applies the ₹1.25 lakh limit.
- Short-term gains on equity-oriented funds go in the part for gains taxed at 20%.
- Gains on debt funds bought on or after 1 April 2023 are treated as short-term whatever the holding period, and taxed at your slab rate.
- Gains on other funds go in long-term or short-term according to the holding period.
Losses are entered in the same schedule. To carry a loss forward, the return has to be filed by its due date.
IDCW
IDCW payouts are entered under income from other sources as dividend income, taxed at your slab rate. Some forms ask for dividend income by the quarter in which it was received. TDS deducted on IDCW appears in your AIS; claim it in the return so it counts against your tax.
Advance tax
If your tax for the year after TDS is ₹10,000 or more, it is due in advance tax instalments during the year. Tax on a capital gain can be paid in the instalments that fall after the gain is made.
Questions
Do I need to report a redemption if no tax is due on it?
Yes. Every redemption and switch belongs in the return, including long-term equity gains under ₹1.25 lakh and losses.
Can I file ITR-1 if I redeemed mutual funds?
Only if your capital gains are long-term gains on equity-oriented funds and listed shares of up to ₹1.25 lakh and you meet the form's other conditions. Otherwise ITR-2 or ITR-3 applies.
Where do I find TDS deducted on IDCW?
In your Annual Information Statement and tax credit statement on the Income Tax Department's e-filing portal.
Each fund page has its returns, risk, costs, managers and everything it holds.
This guide explains how things work. It is not investment, tax or legal advice. Rules change; check the fund house's documents, and a qualified adviser for your own case.