How to Report Mutual Fund Gains in Your ITR for 2026

Mutual fund gains are one of the most common sources of confusion in income tax filing. The gains exist in a statement from CAMS or KFintech, expressed in numbers that the investor often does not fully understand. The ITR-2 form has multiple schedules, and it is not immediately obvious which row or which section should receive each number. The tax rates differ by fund type, by holding period, and by when the units were purchased. Switches between funds, STP transactions, and dividends each have their own treatment.

This guide cuts through that complexity with a practical, step-by-step walkthrough of how to report mutual fund gains in ITR-2 for AY 2026-27, covering the income earned in FY 2025-26. It starts from document collection, moves through how to read the capital gains statement, explains how to enter each type of gain in the correct schedule, and addresses the most common mistakes that lead to defective return notices or incorrect tax calculations.

The guide assumes you are filing ITR-2 online through the income tax portal at incometax.gov.in. The steps and schedules described reflect the ITR-2 form as notified for AY 2026-27.

The first thing to understand is that not all mutual fund activity in a year creates a tax reporting obligation. You only report income in the year it is realised.

A taxable event occurs when units are redeemed, meaning converted back to cash. Buying more units does not create a taxable event. Neither does the NAV rising while you hold units. The gain is only realised when you sell.

However, several activities that investors do not think of as redemptions are treated as redemptions by the income tax law.

• Switching from one scheme to another within the same fund house: A switch from, say, a large-cap fund to a balanced fund is treated as a redemption of the source scheme and a fresh purchase of the target scheme. Capital gains apply on the switched-out units.

• STP (Systematic Transfer Plan) transactions: Each STP instalment is a switch. If you are running an STP from a liquid fund to an equity fund, every monthly transfer creates a capital gain or loss in the liquid fund.

• SWP (Systematic Withdrawal Plan) payments: Each withdrawal is a redemption, generating capital gains.

• Dividend payouts from IDCW plans: These are not redemptions and do not generate capital gains, but dividend income from mutual funds is taxable as income and must be reported in Schedule OS. The fund house deducts TDS of 10 percent on dividends above Rs 5,000 per year per investor.

All of these transactions will appear in your Annual Information Statement (AIS) and in the capital gains statement from the RTA (CAMS or KFintech). If a transaction shows up in AIS and you do not declare it, the income tax department will notice the discrepancy when it processes your return.

Switches, STPs, and SWPs are all treated as redemptions for tax purposes. Every mutual fund capital gains statement will show these as separate transactions. Do not skip them when entering Schedule CG.

Step 1: Download Your Capital Gains Statements

Before opening the ITR portal, collect your capital gains statements. This is the document that contains all the numbers you will enter in Schedule CG.

All Indian mutual fund RTAs are served by two registrars: CAMS (Computer Age Management Services) and KFintech. Each registrar maintains transaction records for the fund houses that use them. Because different fund houses use different registrars, you will typically need both statements to cover your full portfolio.

Registrar	Website for Capital Gains Statement	Fund Houses Covered (examples)
CAMS	camsonline.com > Investors > Statements > Capital Gain and Capital Loss Statement	HDFC, Nippon, SBI, Axis, Franklin, Mirae, DSP, Tata, Canara Robeco, IDFC First, and others
KFintech	mfs.kfintech.com > Investor > Capital Gains and Loss Account Statement	ICICI Prudential, Aditya Birla Sun Life, Kotak, UTI, Sundaram, PGIM, Motilal Oswal, and others
MF Central	mfcentral.com	Provides consolidated view across all fund houses; useful for overview but download individual RTA statements for ITR

To download the CAMS statement: go to camsonline.com, navigate to Investors, then Statements, then Capital Gain and Capital Loss Statement. Enter the email address registered with your mutual fund folios, your PAN, set the financial year to FY 2025-26 (1 April 2025 to 31 March 2026), select All Mutual Funds, choose Excel format, and set a password. The statement will be emailed to you.

To download the KFintech statement: go to mfs.kfintech.com, navigate to Investor, then Capital Gains and Loss Account Statement. Set the period to Previous Financial Year (which will be FY 2025-26 when accessed in June or July 2026), enter your email and PAN, select All Funds, choose Excel format, and set a password. The statement will be emailed.

The capital gains statement will show each redemption or switch transaction with the purchase date, purchase NAV, redemption date, redemption NAV, number of units, and the computed capital gain or loss. It will be pre-classified by the RTA as either STCG or LTCG and as either equity or non-equity (debt). Verify that this classification matches the fund's actual equity orientation.

Step 2: Understand What the Capital Gains Statement Is Telling You

Before entering numbers in the ITR, make sure you understand what each figure in the capital gains statement represents.

The statement typically shows transactions grouped by fund and by gain type. For each transaction or group of transactions, you will see: the sale amount (redemption proceeds), the cost of acquisition (purchase cost), and the computed capital gain (sale minus cost). For LTCG on equity funds, the statement may also show the grandfathered cost, which is the fair market value as on 31 January 2018 for units purchased before that date.

For AY 2026-27, there is no longer any need to split transactions by whether they occurred before or after 23 July 2024. In AY 2025-26, investors had to bifurcate gains into pre and post 23 July 2024 because the Budget 2024 rate changes took effect mid-year. For AY 2026-27, the entire FY 2025-26 uses uniform rates. The capital gains statement from your RTA will already reflect this; there should be no dual-period reporting.

Gain Type in Statement	Tax Rate	Which Schedule in ITR-2
STCG from equity mutual funds (equity-oriented, held 12 months or less)	20% flat (Section 111A)	Schedule CG, Section A1
LTCG from equity mutual funds (held more than 12 months)	12.5% above Rs 1.25 lakh annual exemption (Section 112A)	Schedule CG, Section B1 and also Schedule 112A
STCG from debt mutual funds (units purchased from 1 April 2023)	Slab rate (taxed as income)	Schedule CG, Section A2 (short-term at slab rate)
LTCG from debt mutual funds (units purchased before 1 April 2023, held more than 36 months)	20% without indexation (Section 112); or 12.5% without indexation, whichever is lower	Schedule CG, Section B2 or as directed by portal
STCG from debt mutual funds (units purchased before 1 April 2023, held 36 months or less)	Slab rate	Schedule CG, Section A2
STCG from hybrid funds with less than 65% equity allocation	Slab rate	Schedule CG, Section A2
LTCG from hybrid funds with 65%+ equity (equity-oriented)	Same as equity LTCG: 12.5% above Rs 1.25 lakh	Schedule CG, Section B1 and Schedule 112A

If you are unsure whether a hybrid or balanced fund is equity-oriented or debt-oriented for tax purposes, check the fund's scheme information document or the RTA statement itself, which will have already classified it. Equity-oriented means the fund maintained at least 65 percent average allocation to domestic listed equity shares during the financial year.

Step 3: Reconcile Your Capital Gains Statement with the AIS

The Annual Information Statement on the income tax portal aggregates data reported by fund houses and RTAs about your transactions. Before filing, compare the totals in your CAMS and KFintech statements with what the AIS shows for mutual fund capital gains. Discrepancies can arise from several causes: SIP instalments that were reported as a batch rather than individually, switches that one RTA reported and the other did not, or transactions in fund houses that have their own RTA systems not covered by CAMS or KFintech.

To access your AIS: log in to incometax.gov.in, go to e-File, then Income Tax Returns, then View AIS. Within AIS, navigate to the capital gains section. Compare the figures shown for equity and debt mutual fund gains with your RTA statements.

If the AIS shows figures that differ from your RTA statements, use the feedback mechanism in AIS to flag the discrepancy. Select the relevant transaction and mark it as incorrect, duplicate, or not relating to you as appropriate. This feedback is recorded but does not prevent you from filing. File your return with the figures from your own verified RTA statements. In the event of a later query, your RTA capital gains statement is the primary documentary evidence.

Some investors also hold mutual fund units in demat form through their broker. Capital gains from demat-held mutual funds may be reported by the depository or broker rather than by the RTA. Check whether any of your mutual fund investments are held in demat mode and whether those transactions appear in your broker's capital gains statement rather than the CAMS or KFintech statement.

Step 4: Log In and Navigate to Schedule CG

Once you have your capital gains statement and have reconciled it with AIS, log in to incometax.gov.in with your PAN and password. Navigate to e-File, then Income Tax Returns, then File Income Tax Return. Select the Assessment Year as 2026-27, choose Online filing mode, and select ITR-2 as the applicable form.

After starting the form, you will go through several sections. Most investors work through these sections in order: General Information, Salary Income (from Form 16), House Property, Capital Gains, Other Sources (dividends and interest), Deductions, and then the tax computation summary. The order in which you fill these does not matter; what matters is that all sections are completed before submission.

To navigate to Schedule CG, look for the Capital Gains section in the left navigation panel or in the main form flow. The portal may show a checklist asking you to confirm which types of capital gains you have. Select all applicable types: equity STCG, equity LTCG, debt fund gains (if applicable), and any property or other gains if relevant.

Step 5: Enter Equity STCG (Section 111A)

In Schedule CG, Section A1 covers short-term capital gains from equity shares and equity mutual funds where STT was paid (governed by Section 111A). This is where you enter the STCG from equity-oriented mutual funds that were held for 12 months or less.

The portal will typically ask for the total short-term capital gains amount. Enter the aggregate STCG from all equity mutual fund redemptions and switches where the holding period was 12 months or less. This figure comes from the STCG section of your RTA capital gains statement, equity category only. Do not include debt fund STCG here.

Some versions of the portal ask for a quarterly breakdown of STCG: how much arose in each quarter of the financial year. This is needed to compute advance tax obligations. Your RTA statement shows the date of each redemption, so you can group transactions by quarter (April to June, July to September, October to December, January to March) if required.

If you have capital losses under Section 111A (STCG losses from equity), enter the loss amount separately in the loss section. The portal will use these losses to offset other short-term and long-term gains.

Step 6: Enter Equity LTCG (Section 112A) and Schedule 112A

Equity LTCG from mutual funds is taxed at 12.5 percent above the Rs 1.25 lakh annual exemption under Section 112A. This section requires the most careful entry in Schedule CG.

In Schedule CG, Section B1, enter the total LTCG from equity mutual funds held for more than 12 months. Enter the full gross LTCG before the Rs 1.25 lakh exemption. The portal will apply the exemption automatically; do not manually subtract it.

In addition to Schedule CG, equity LTCG also requires entry in Schedule 112A. This schedule requires scrip-level or fund-level detail for each LTCG transaction. For each equity mutual fund from which you had long-term gains, you typically enter: the ISIN code of the fund, the name of the fund, the number of units sold, the sale price per unit, the purchase price per unit, the fair market value per unit as on 31 January 2018 (for units purchased before that date, for grandfathering), and the computed LTCG.

The grandfathering rule applies to equity mutual fund units purchased before 1 February 2018. For such units, the cost of acquisition for computing LTCG is the higher of: the actual purchase price, or the fair market value (NAV) as on 31 January 2018. Your RTA capital gains statement will show this grandfathered cost if applicable. If the statement does not show it and you have pre-2018 units, you will need to look up the NAV of your fund as on 31 January 2018 from the AMC's historical NAV records or from AMFI.

The portal in recent years has allowed bulk upload of Schedule 112A data from an Excel file. Check whether this option is available in the AY 2026-27 portal, as it significantly reduces manual entry for investors with many equity fund transactions.

Schedule 112A requires fund-level detail for every equity LTCG transaction. Enter the gross LTCG amount, not the net after the Rs 1.25 lakh exemption. The exemption is applied by the portal automatically after you have entered all transactions.

Step 7: Enter Debt Mutual Fund Gains

Debt mutual fund gains are taxed differently depending on when the units were purchased, as covered in earlier articles in this series.

For units purchased on or after 1 April 2023, all gains are treated as short-term capital gains regardless of holding period and are taxed at the investor's applicable slab rate. Enter these gains in Section A2 of Schedule CG, the section for short-term gains taxed at slab rate (not the Section 111A equity rate). The portal treats these as income added to your total and taxed at your slab rate.

For units purchased before 1 April 2023 and held for more than 36 months: these qualify as long-term capital gains under the old rules. They can be taxed at 20 percent without indexation (under Section 112) or at 12.5 percent without indexation, whichever produces the lower tax liability. Your RTA statement for these units will show the gain amount. Enter these in Section B2 of Schedule CG or as directed by the portal's interface for the applicable section.

For units purchased before 1 April 2023 and held for 36 months or less: these are short-term and taxed at slab rate, same as post-April 2023 units. Enter in Section A2.

Units Purchased	Holding Period at Redemption	Tax Treatment	Where in Schedule CG
On or after 1 April 2023	Any period	Slab rate (treated as income)	Section A2 (STCG at slab rate)
Before 1 April 2023	36 months or less	Slab rate	Section A2 (STCG at slab rate)
Before 1 April 2023	More than 36 months	Lower of: 20% without indexation or 12.5% without indexation	Section B2 (LTCG under Section 112) or as directed

Step 8: Report Dividend Income in Schedule OS

Dividends from mutual funds, including payouts from IDCW (Income Distribution cum Capital Withdrawal) plans, are not capital gains. They are income from other sources and must be reported in Schedule OS, not in Schedule CG. This is a common source of confusion.

The dividend amount will appear in your AIS and should also be in your bank statements and AMC transaction statements. TDS of 10 percent is deducted by the AMC on dividends above Rs 5,000 per financial year per investor per AMC. This TDS is credited in your Form 26AS and AIS.

In Schedule OS, look for the section for income from dividends. Enter the total dividend income from all mutual funds received during FY 2025-26. The TDS already deducted will be credited against your total tax liability when the portal computes your tax.

If you received dividends from multiple fund houses and some were below the Rs 5,000 TDS threshold (meaning no TDS was deducted), you must still declare the full dividend amount. The absence of TDS does not exempt the income from declaration.

Step 9: Handle Losses and Carry-Forward

If your capital gains statement shows capital losses from mutual fund redemptions, these are entered in the loss sections of Schedule CG and can reduce your taxable gains.

Short-term capital losses (STCL) from any asset, including equity and debt funds, can be set off against both STCG and LTCG from any capital asset in the same year. Long-term capital losses (LTCL), which are losses from equity mutual funds held more than 12 months, can only be set off against LTCG, not against STCG.

The portal handles the set-off calculation automatically. You enter the gross gains and the gross losses separately in the appropriate sections, and the system computes the net taxable gain after set-off.

If after set-off you still have remaining losses, they are carried forward to future years. These are captured automatically in Schedule CFL (Carry Forward Losses) when you submit the return. You only have carry-forward rights if you file your return by the due date of 31 July 2026. A belated return forfeits carry-forward rights.

If you have brought-forward losses from prior years that you declared in previous returns, you enter them in Schedule BFLA (Brought Forward Loss Adjustment). The portal should pre-fill this from your prior year returns if you have been filing consistently on the same PAN and portal account.

Step 10: Enter the Quarterly Break-up of Capital Gains

Schedule CG includes a section where you must enter the quarter-wise break-up of your capital gains. This information is used to compute whether advance tax was paid correctly and in sufficient amounts through the year. It is required because advance tax liability arises during the year as income is earned, not just at filing time.

The four quarters for FY 2025-26 are: Q1 (1 April to 15 June 2025), Q2 (16 June to 15 September 2025), Q3 (16 September to 15 December 2025), and Q4 (16 December 2025 to 15 March 2026).

From your capital gains statement, identify the date of each redemption or switch transaction and assign the gain or loss to the appropriate quarter. Your RTA statement shows transaction dates, making this allocation straightforward.

Many investors find this step tedious when they have many transactions. The purpose is not to penalise you for getting it slightly wrong; it is to compute whether advance tax interest under Sections 234B and 234C applies. If you paid advance tax on time and in adequate amounts, this step has no additional financial consequence. If you did not pay advance tax, the quarterly break-up helps the portal compute the interest on the shortfall.

Step 11: Verify the Tax Computation Before Submitting

After entering all capital gains, dividends, and other income, the portal computes your total tax liability. Before submitting, review the computation summary carefully.

Check the following in the tax computation summary:

• Equity LTCG: The portal should show gross LTCG minus the Rs 1.25 lakh exemption, with 12.5 percent tax on the remainder. Verify the exemption has been applied.

• Equity STCG: Should be taxed at flat 20 percent under Section 111A.

• Debt fund gains (post-April 2023 units and slab-rate items): Should be added to your salary income and taxed at your applicable slab rate.

• Dividend income: Should appear as income from other sources and be taxed at your slab rate.

• TDS credits: All TDS deducted on dividends and on equity gains for NRIs (if applicable) should appear as credits against the tax liability.

• Net tax payable or refundable: If the total tax liability exceeds total TDS paid, the difference is self-assessment tax (SAT) and must be paid before submitting. If TDS exceeds tax liability, the difference is a refund.

If you owe self-assessment tax, pay it using Challan 280 on the income tax portal before submitting the return. Select Income Tax (Other than Companies), Assessment Year 2026-27, and type of payment as Self-Assessment Tax (300). After payment, enter the challan details (BSR code, challan serial number, date, and amount) in the relevant section of the ITR before submitting.

Step 12: E-Verify Immediately After Filing

Filing the return and e-verifying are two separate steps. A return that has been filed but not verified within 30 days of filing is treated as not filed. E-verification must be completed before the return is accepted.

The easiest verification methods are Aadhaar OTP (linked to your Aadhaar mobile number), net banking (for bank accounts linked to the portal), and demat account-based verification (for those with active demat accounts). All three can be completed within minutes of filing.

After e-verification, you will receive an ITR-V acknowledgement number. Keep this for your records. The portal will show your return as verified, and processing will begin. Most straightforward refund claims are processed within 4 to 8 weeks of filing and verification.

Common Mistakes When Reporting Mutual Fund Gains

• Entering gains net of the Rs 1.25 lakh LTCG exemption: Enter the full gross LTCG. The portal deducts the exemption automatically. Entering the net amount causes a discrepancy with the AIS data and may trigger a defective return notice.

• Skipping switch and STP transactions: Every switch and every STP instalment is a redemption. If your RTA statement shows these transactions with associated gains or losses, they must be entered. They will also appear in your AIS.

• Putting debt fund gains in the equity section: Post-April 2023 debt fund gains are slab-rate income and go in Section A2, not the equity STCG or LTCG sections.

• Not filing Schedule 112A for equity LTCG: Simply entering the LTCG total in Schedule CG without completing the fund-level detail in Schedule 112A is incomplete. Schedule 112A is mandatory for LTCG under Section 112A.

• Missing the quarterly break-up of gains: This section is required for advance tax computation. Leaving it blank or entering all gains in Q4 leads to incorrect interest calculations.

• Treating dividend income as capital gains: IDCW payouts from mutual funds are dividends, reported in Schedule OS, not in Schedule CG.

• Not reconciling AIS before filing: Discrepancies between the AIS data and your filed return will be flagged by the portal or by the department during processing. Reconcile first and explain any genuine discrepancies using the AIS feedback mechanism.

• Not completing e-verification: A submitted but unverified return is not a filed return. Always e-verify on the same day you submit, not days later.

What You Do Not Need to Report

As important as knowing what to report is knowing what not to report, so you do not create complexity or confusion where none exists:

• Unredeemed mutual fund units: If you bought units and did not sell them during FY 2025-26, no capital gain has arisen and there is nothing to declare in Schedule CG. The unrealised appreciation in your portfolio is not taxable until you redeem.

• Current-year NAV appreciation: The rise in NAV over the year is not income until units are sold.

• SIP instalments: Each SIP purchase is an investment, not income. SIP purchases do not appear in Schedule CG unless some of those units were also redeemed during the year.

• Units held in demat form that were not transacted: Simply holding mutual fund units in a demat account is not a taxable event.

• Dividend income below the Rs 5,000 per AMC TDS threshold: While you should still declare dividend income of any amount in Schedule OS, the absence of TDS on small amounts below the threshold does not mean the income is exempt. Declare it regardless.

Disclaimer: This article is for educational purposes only and does not constitute tax or financial advice. Tax provisions, ITR form structure, and portal features cited reflect the position as understood for AY 2026-27 (FY 2025-26) as of June 2026. The income tax portal's interface may differ from what is described. Tax rules are subject to CBDT notifications and circulars. Please consult a qualified chartered accountant for advice specific to your situation before filing your return.