LTCG Under ₹1.25L? You Still Must File ITR

Many investors think zero tax on stock gains means no ITR filing needed. Wrong. The ₹1.25 lakh LTCG exemption only saves you from paying tax — it does not decide whether you must file a return. Missing the deadline can attract penalties.

Here's what happened: Section 112A exempts long-term capital gains up to ₹1.25 lakh on equity shares and equity mutual funds from income tax.. ITR filing obligation is determined by your total income crossing the basic exemption limit — not by whether your LTCG is taxable.. Even with zero tax payable, investors who sold equity funds or stocks must report those transactions in their ITR under Schedule CG..

What you should do: Check your total gross income including LTCG — if it crosses ₹2.5 lakh (₹3 lakh for seniors), file your ITR regardless of tax owed.. Download your Capital Gains Statement from your broker or mutual fund platform and include it accurately under Schedule CG in your ITR.. File before July 31, 2025 to avoid a ₹5,000 late filing penalty under Section 234F — don't wait assuming zero tax means no deadline..

Even if your net tax is zero, failing to disclose capital gains in your ITR can trigger a scrutiny notice from the Income Tax Department — always report, even when exempt.