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Finance sells mutual fund business to HSBC AMC for 3,191 crore.

L&T Finance Holdings Ltd and HSBC Asset Management (India) Private Ltd (HSBC AMC) on Thursday entered into a definitive agreement whereby the latter will acquire 100% equity shares of L&T Investment Management Ltd for $425 million or about ₹3,191 crore. The proposed acquisition is subject to regulatory approvals.

With assets under management (AUM) of ₹803 billion and over 2.4 million active folios, L&T Mutual Fund is currently the 12th largest asset management company in India as of September 2021. On the other hand, HSBC AMC had an AUM of ₹117 billion.

 Reporting capital gains in tax returns. Calculation of Capital Gains Tax fo MFs, is a daunting task. So do it carefully.

Reporting the capital gains on mutual fund units or stocks can turn out to be a complex task for investors

The deadline for filing income tax return (ITR) for assessment year 2021-22 is nearly up. If you have sold your mutual fund (MF) units or stocks holdings in the financial year 2020-21 and are yet to file your ITR, you could end up in some trouble. This is because reporting the gains, which are essentially the profit part in the total sale value, from MFs or stocks capital is a complex task. To begin with, investors who invest via systematic investment plans (SIPs) in MFs have the tedious task of sifting through the monthly or quarterly transaction data as per the frequency of the SIP opted.

Further, tax rules vary across debt-oriented and equity-oriented MFs and as per the holding period of the MF units or stocks.

LTCG (long-term capital gains) on equity funds is realized when they are sold after a holding period of at least 12 months. The LTCG tax rate on equity funds is 10%, whereas short-term capital gains (STCG) are taxed at a flat rate of 15% . LTCG up to ₹1 lakh in a financial year is exempt from tax.

For debt funds, if the MF holding is sold within three years of purchase, STCG is realized and taxed at slab rates. LTCG on debt funds is taxed at 20% after indexation, which allows taxpayers to adjust the purchase price of the asset as per inflation.

Capital gains are calculated by deducting the sale value of MF units with its purchase price, or known as cost of acquisition. Capital gains are reported in ITR-2 and ITR-3 by salaried individuals and those with a business income, respectively.

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