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MUMBAI: Can the income tax department accept long-term capital gains tax (LTCG) statement given by the AUM of mutual funds?

- Name withheld on request.

AUM or Asset Under Management is an indicator of a mutual fund's performance and its size. It refers to the total market value of the assets that a mutual fund manages at a given point of time.

Investments in mutual funds are generally managed by asset management companies (AMCs). These companies provide a year-end detailed report of the transactions that have been entered by a person along with summary of the capital gain or loss incurred by that unitholder. Even though one can rely on the data provided by these fund managers, but calculations carried out by them to arrive at the figures of gain or loss incurred should be thoroughly verified before filing the return of income. One must check whether provisions related to grandfathering, indexation, etc., have been correctly applied or not. This practice also prevails across industry.

The income tax department has in the past accepted such statements from AMCs for the purpose of verification of capital gains. Also, at an individual level it gets very difficult to maintain the transaction wise details and, hence, such statements are a reliable source of information. The data for purchase of mutual funds is also captured in form 26AS on basis of the records filed by such mutual fund managers with the income tax department.

- Answered by Shailesh Kumar, Partner, Nangia & Co LLP. Send you queries to

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