PSA: Cleartax now supports parsing Zerodha statements for e-filing ITR-2 for free

[ashleysavedbygrace]

Previously, I had to enter details on cleartax one by one per trade which was quite painful, but it now supports parsing zerodha statements, along with CAMs/Karvy for mutual fund transactions, to automatically fill the tax return with all of the capital gain details required to be filled in.

Filing via income tax department's tools is also complex as it requires calculating everything and then entering totals, but the process has become much more seamless this year via cleartax.

 

[rrk93]

@ashleysavedbygrace There needs to be a standard format for statements (mandated by SEBI?).

Cleartax can't realistically support all brokers and zerodha being the biggest gives them the advantage.

 

[ranran19]

@rrk93 Per this official press-release from CBDT, the scrip wise details in the ITR for AY 2020-21 are required to be filled up only for reporting of LTCG for such shares/units which are eligible for the benefit of grandfathering.

So prima facie, it looks like you won't need to fill up 112A if you are not going to claim grandfathering benefits (i.e. acquisition date after Jan 31, 2018.)

Curiously, the press release also says that such a requirement for detailed reporting is not uncommon internationally: In USA, a taxpayer having capital gains from transfer of shares is required to fill scrip wise details in Schedule-D of Form 1040.

 

[ignatiusdidache]

@ranran19 >So prima facie, it looks like you won't need to fill up 112A if you are not going to claim grandfathering benefits (i.e. acquisition date after Jan 31, 2018.)

Thats what the Press Release says, but the ITR form doesnt let you declare any LTCG (Equity) if 112A is not filled.

> In USA, a taxpayer having capital gains from transfer of shares is required to fill scrip wise details in Schedule-D of Form 1040

112A actually requires transaction wise details, not scrip wise (despite statements to the contrary on twitter)

 

[ranran19]

@ignatiusdidache

but the ITR form doesnt let you declare any LTCG (Equity) if 112A is not filled.

That seems to have been a known issue and flagged as such. I don't know if any action has been taken to resolve it.

112A actually requires transaction wise details, not scrip wise (despite statements to the contrary on twitter)

& that would be rightly so. If you look at the purpose of this schedule, to enable the "right" grandfathering computation, you do need to provide transaction-wise details. Edit: I'm not sure I was thinking correctly. I guess scrip-wise details too should serve to arrive at the right grandfathering computation. Having to enter all transactions is definitely a big hassle, esp for MF systematic transactions.

I think the reference to US IT returns is only to deflect the criticism that Indian tax authorities are making some very harsh demands from investors.

I don't know what Twitter statements you're referring to, but they don't matter.

Thus far, all of us have been in this very happy heaven of zero LTCG on equity and thus engaged in transacting indiscriminately as long as equity gains were long-term. Sadly, this change in regime is adding to all our paperwork hassles.

 

[ignatiusdidache]

@ranran19

That seems to have been a known issue and flagged as such. I don't know if any action has been taken to resolve it.

Its 5 weeks to the ITR filing deadline, and the income tax department has not yet acknowledged the issue, so I think its fair to say the issue is not getting fixed for this year atleast.

> I don't know what Twitter statements you're referring to, but they don't matter.

As per IT departments own Twitter account, scrip wise reporting is required (

https://twitter.com/i/web/status/1309867224899842048

), but the form requires transaction wise reporting.

> Thus far, all of us have been in this very happy heaven of zero LTCG on equity and thus engaged in transacting indiscriminately as long as equity gains were long-term. Sadly, this change in regime is adding to all our paperwork hassles.

Somehow "transacting indiscriminately" sounds like we were doing something wrong\illegal, by buying into the weekly SIP\Daily cost averaging sort of purchases.

 

[ranran19]

@ignatiusdidache

Somehow "transacting indiscriminately" sounds like we were doing something wrong\illegal, by buying into the weekly SIP\Daily cost averaging sort of purchases.

Hahaha! You're right, but of course I didn't intend to mean it that way!

I meant that most of the equity investors were just lucky to not have to face the nightmare of income tax "reporting" requirements even when there is no tax liability. Were we made aware of such requirements, we would have been more circumspect in the kind & the number of transactions we undertake.

IMHO, CBDT should simplify all this reporting or somehow automate it by working with intermediaries (brokers / AMCs / ...) since it is so counterproductive to the financialization journey of the economy. Taxpayers like us have to do so much of paperwork for investing in plain-vanilla equity, even when there is little gain to the exchequer or the taxpayers. This will be just a turn-off for newbie investors. Honest taxpayers essentially get penalized with any additional Reporting requirements in ITR.

Edit: & Yes, twitter messages from a govt department handle usually amount to little without backing of a legal circular / notification. Unless we're dealing with some situation that requires tick-by-tick updates (e.g. city police handles during early Covid lockdown days), tweets from govt authorities are a vanity exercise.

 

[ranran19]

@ignatiusdidache

Thats what the Press Release says, but the ITR form doesnt let you declare any LTCG (Equity) if 112A is not filled.

So I've validated this with multiple ITRs in ITR-2 form.

1. You can provide consolidated (need neither transaction-wise, nor scrip-wise) details in Sch 112A for LTCG if acquisition is post Jan-31, 2018.
2. For pre-Jan-31, 2018 acquisitions, you need to provide scrip-wise details in Sch 112A (and not transaction-wise details.)

 

[ignatiusdidache]

@ranran19 Which version of the form are you using? Java or Excel?

 

[ranran19]

@ignatiusdidache Excel - always excels.

One caveat just in case - I'm speaking of MF SIP transactions.

I had like hundreds of those across various schemes. I was able to consolidate those up to Jan 31, 2018 and enter the consolidated details per scheme (basically per ISIN) on Sch 112A. So one row = one ISIN.

 

[deepcoder]

@ashleysavedbygrace This is awesome. I hope we move to a system where most of return filing is automated for salaried people. most people just have a salary, some investments, maybe own a house and get some rent, etc.

 

[madakronic]

@ashleysavedbygrace I don't get how Cleartax just gives away all ITR filing conveniences for free. What's the hidden catch here? Possibly, sell data to banks, NBFCs and other such entities to help them target potential credit worthy customers?

 

[ashleysavedbygrace]

@madakronic They can't sell data as they have to comply with income tax department ERI (e-return intermediary) guidelines in order to provide e-filing services.

They do have paid services for revenue though. You can purchase online CA services from them and their GST solutions for businesses are paid too.

 

[jacobk]

@ashleysavedbygrace Do remember that beyond certain income ClearTax will charge you a fixed fee for filing returns.

I learnt it the hard way. I worked hard to submit all the details and in the last page they said I will have to shell out 500/- I was under assumption that it was free.

 

[godtalker]

@jacobk Never happened to me. Any rough figure?

 

[jacobk]

@godtalker Not sure..

I am willing to pay for it.

Just that they asked for money the sneaky way..

 

[david321e]

@jacobk Also only first 3 tax filings are free. You have to pay ₹299 from the fourth such filing.

 

[ashleysavedbygrace]

@jacobk I've been e-filing with them since 2015, and it was free every time. Had you tried before that?

 

[jacobk]

@ashleysavedbygrace Depends on your income level I guess. I did so in 2018.. Was disappointed with their sneaky ways. So never filed again..

 

[ashleysavedbygrace]

@jacobk You could try tweeting about it and see how they reply.