Mutual Fund Investment and 'IT Scrutiny'

[blackindianhawk]

A C.A. I know says that if we invest Rs. 200,000 or more in any mutual fund, in any one financial year, the event could lead to an income tax scrutiny.

Do you agree with this?

Thank you.

 

[mmca2006]

A C.A. I know says that if we invest Rs. 200,000 or more in any mutual fund, in any one financial year, the event could lead to an income tax scrutiny.

Do you agree with this?

Thank you.

Scrutiny case depends on many factors set by I.Tax dept, however if any body purchased mutual fund worth Rs,2lac , it may be cross verified by the dept with the information submitted by financial institutions, banks, mutual funds and other authorities through AIR . So I think he actually wanted to mean to avoid AIR Reporting by purchasing Less than Rs. 2 lac in one financial year.
You may google for the information or may get some details from --tax man tra. com/ ereturns /other /report.html.

 

[blackindianhawk]

Dear MMCA,

Thank you for the answer and the link.

One question:

This 2 lakh limit on mutual funds per year --

If one invests say 5 lakh in one year in 5 different mutual funds, will this also qualify for AIR?

In this case, it becomes 1 lakh per mutual fund per year right?

 

[mmca2006]

Dear MMCA,

Thank you for the answer and the link.

One question:

This 2 lakh limit on mutual funds per year --

If one invests say 5 lakh in one year in 5 different mutual funds, will this also qualify for AIR?

In this case, it becomes 1 lakh per mutual fund per year right?

Please follow the link , it will clear your doubts--
http://www. bcas online. org / articles/ artin.asp?721

 

[blackindianhawk]

Your link says

"the assessee will have to give a consolidated figure of investment in different Mutual Funds if payment to each MF is Rs.2 lacs or more."

That clears this issue. Thank you.

 

[blackindianhawk]

MMCA, I have one question.

For example:

1) Fresh investment in one Financial year in ICICI Fund X = Rs 150,000/-

2) 4 year old existing ICICI Fund Y, switch in same financial year = Rs 100,000/-

So fresh investment ICICI Fund X + old ICICI fund Y switch = Rs 250,000/-

Does this quality for AIR?

I believe IT deptt looks at 'fund switch' as 'redemption + reinvestment'.

Hence the question.