Mutual fund investors face issues in filing income tax returns; Here’s solution

During the current ITR filing season, there is a discrepancy in the AIS report of such taxpayers who have bought and sold mutual funds in the last financial year.

New Delhi: While filing income tax return for the financial year 2024-25, investors who have done mutual fund transactions are facing a strange problem. A error is has been seen in their AIS reporting. Lets know about this error and how can it be avoided, reports Dynamite News correspondent.

During the current ITR filing season, there is a discrepancy in the AIS report of such taxpayers who have bought and sold mutual funds in the last financial year. In fact, in their AIS reporting, the same mutual fund redemption or sale is being reported three times under SFT (Specified Financial Transactions).

What Leads To Confusion?

According to experts, this is happening because all the three major reporting entities - NSDL, CAMS and KFIN - have given different reports of the same MF sale to the department. Whereas in reality the mutual fund was sold only once. With the same information coming from three places, the AIS now shows three times the sale amount, leading to confusion and inflated capital gains for investors.

This is a classic case of duplicate reporting from different RTAs (registrars and transfer agents) or depositories due to overlapping data-sharing mechanisms that have been overlooked while preparing the AIS.

How To Avoid This?

According to experts, taxpayers and professionals who rely on auto-import of AIS data in their ITR filing software may end up declaring three times the MF redemption amount due to this glitch, which may impact their tax liability. To avoid this inconvenience, they should not file their ITR until investors cross-verify this glitch with their actual mutual fund statements or broker reports.

According to experts, investors should always match mutual fund sales with Form 26AS, AIS and original fund house or demat statement while filing ITR. They have advised not to blindly accept the entries given in AIS, especially in the case of mutual fund transactions.

What If Last Date Missed?

If you miss the deadline of September 15, 2025, you still have a chance. Updated returns can be filed under Section 139 (8A). Earlier this facility was limited to 24 months, but now it has been increased to 48 months. However, for this you will have to pay 60 to 70 percent additional tax.