Why multiple brokers make this harder than it looks
Each broker and each fund house issues its own capital-gains or profit-and-loss statement, and each one only sees the trades that happened on its own platform. None of them sees the whole picture. So if you bought a stock through one broker and the corporate action or a transfer landed it elsewhere, or if you hold the same fund across two platforms, no single statement computes your true gain.
The return has to bring all of them together, line the buy and sell sides up correctly, and then reconcile the combined result against the Annual Information Statement (AIS) and Form 26AS — which the department builds from the same brokers and fund houses, plus the registrars. When the AIS shows a sale your statements don't capture cleanly, or a cost the broker reported on a different basis, the mismatch has to be resolved before filing, or the return draws a query later.
For a non-resident this matters more than for a resident, because TDS is deducted on redemptions (Section 195) and you are usually filing specifically to reconcile that withholding and claim back any excess. The reconciliation is the work; the form is the easy part.
Short-term, long-term, and the rates that changed in July 2024
Capital gains split by how long you held the asset, and listed equity and equity mutual funds have their own rules and rates. The rates for listed equity changed for transfers on or after 23 July 2024, so a single financial year straddling that date can carry both old and new rates.
| Asset and holding | Treatment | Rate (from 23 Jul 2024) |
|---|---|---|
| Listed equity / equity MF, > 12 months | Long-term (Section 112A) | 12.5% over ₹1.25L exemption |
| Listed equity / equity MF, ≤ 12 months | Short-term (Section 111A) | 20% |
| Debt MF (bought on/after 1 Apr 2023) | Taxed as short-term, slab | At your applicable rate |
For listed equity and equity-oriented mutual funds held more than twelve months, the gain is long-term under Section 112A: the first ₹1.25 lakh of such gains in the year is exempt, and the balance is taxed at 12.5% (for transfers on or after 23 July 2024). Held twelve months or less, the gain is short-term under Section 111A, taxed at 20% for transfers on or after that date.
Debt-oriented mutual funds bought on or after 1 April 2023 no longer get long-term treatment at all — those gains are taxed as short-term at your applicable rate however long you held them. Because the year can contain transfers both before and after 23 July 2024, each transaction is dated and rated individually rather than rolled up at one rate.
Grandfathering on equity bought before 31 January 2018
Long-term gains on listed equity were tax-free until Section 112A was introduced. To avoid taxing the gain that built up before the regime existed, the law grandfathers older holdings: for shares and equity mutual funds bought before 1 February 2018, the cost used in the gain calculation is the higher of what you actually paid and the asset's market value as on 31 January 2018, capped at the eventual sale price.
The practical effect is that the run-up in value up to 31 January 2018 is protected, and only the gain from that date forward is taxed. For an investor who has held blue-chip equity or an old fund for many years, this can be the difference between a large taxable gain and a modest one — but it only works if the 31 January 2018 reference value is applied to each eligible holding, which a generic broker statement often doesn't do.
This is reported in the dedicated Schedule 112A of ITR-2, line by line, with the original cost, the 31 January 2018 value and the sale value for each grandfathered holding. Getting the reference values right across many holdings is one of the more painstaking parts of the return.
A worked example: Vikram across two brokers and an AMC
Vikram, an NRI in Singapore, sells in the financial year through two brokers and redeems units with one mutual fund house. After consolidating all three statements, his gains come out as: ₹6,00,000 long-term on listed equity (all sold after 23 July 2024), ₹2,00,000 short-term on listed equity, and a mix of redemptions on which the fund house deducted TDS under Section 195.
On the long-term equity, the first ₹1,25,000 is exempt under Section 112A, leaving ₹4,75,000 taxed at 12.5% — about ₹59,375. Two of the holdings were bought in 2015, so their cost is stepped up to the 31 January 2018 value under grandfathering before the gain is even computed, which trims the long-term figure compared with using the original purchase price.
The ₹2,00,000 short-term equity gain is taxed under Section 111A at 20% — ₹40,000. Against the total tax, the TDS the fund house already deducted on the redemptions is set off; if the withholding was more than the final liability, the excess is refunded, and if less, the balance is paid before filing.
Filed on ITR-2 with Schedule CG and Schedule 112A completed line by line, and every transaction reconciled against Vikram's AIS, the return holds up against the department's own data. Done by eye across three statements with one blended rate, it usually doesn't.