Filing With Capital Gains? How TaxBuddy Auto-Fills STCG/LTCG from AIS
- aakash nigam
- Sep 15, 2025
- 8 min read
Capital gains are profits earned from the sale of capital assets such as stocks, mutual funds, real estate, or other investments. Understanding how these gains are calculated, reported, and taxed is crucial for accurate income tax filing. For the Financial Year 2024-25 (Assessment Year 2025-26), several updates have been made to streamline capital gains reporting, including new features in the Annual Information Statement (AIS) and improved integration with tax filing platforms like TaxBuddy. These changes aim to reduce errors, improve compliance, and make tax filing simpler for investors and professionals alike. Accurate reporting of short-term and long-term capital gains ensures correct taxation, timely refunds, and avoidance of scrutiny or notices from the Income Tax Department.
Table of Contents
Understanding Capital Gains and Their Types
Capital gains are categorized based on the holding period of the asset sold. Short-term capital gains (STCG) apply to assets held for less than 36 months (for real estate) or 12 months (for equity and mutual funds), while long-term capital gains (LTCG) apply to assets held longer than these periods. STCG is typically taxed at higher rates, while LTCG enjoys concessional rates with certain exemptions. Correctly classifying capital gains is essential to avoid underreporting income and facing penalties. Different types of assets—equity, debt instruments, property, gold, and others—have distinct tax rules, and the Income Tax Department uses AIS to cross-verify the reported gains.
Latest Rules for Capital Gains in FY 2024-25 (AY 2025-26)
For the Financial Year 2024-25 (Assessment Year 2025-26), the Income Tax Department has introduced several clarifications and updates regarding the computation and reporting of capital gains. These changes are aimed at improving compliance, reducing errors, and ensuring accurate reflection of transactions in the Annual Information Statement (AIS). Taxpayers must carefully adhere to these updates to avoid penalties, mismatches, or delays in refund processing.
Exemptions Under Sections 54, 54EC, and 54F The exemptions available for capital gains continue to be applicable under Sections 54, 54EC, and 54F, but taxpayers are required to ensure proper documentation and reporting:
Section 54: Exemption on gains arising from the sale of a residential property is available if the proceeds are reinvested in another residential property. Taxpayers must declare the new property purchase date and amount invested to claim the exemption.
Section 54EC: Gains can be invested in specified bonds, such as those issued by the National Highways Authority of India (NHAI) or Rural Electrification Corporation (REC), to claim exemption. The maximum investment allowed for exemption is ₹50 lakh.
Section 54F: For capital gains arising from the sale of any asset other than a residential property, exemption is available if the net sale proceeds are reinvested in a residential property. Proper evidence of investment and property ownership is essential to claim the benefit.
Taxation on Equity and Debt Securities
Long-Term Capital Gains (LTCG): Gains from the sale of equity shares or equity-oriented mutual funds exceeding ₹1 lakh in a financial year are taxable at 10% without indexation. Gains below this threshold remain exempt.
Short-Term Capital Gains (STCG): Gains from equity shares or mutual funds held for less than 12 months are taxed at a flat rate of 15%.
Reporting Requirements and TDS Compliance The government has emphasized accurate reporting of capital gains, especially for listed securities, mutual funds, and property transactions:
Mutual Funds and Listed Securities: Taxpayers must provide exact purchase and sale dates, transaction values, and the number of units sold. Discrepancies between declared gains and TDS reflected in AIS may trigger notices.
Property Transactions: For capital gains arising from property sales, correct documentation of the sale consideration, cost of acquisition, and exemptions claimed must be provided. This ensures proper reconciliation with TDS and prevents delays in processing refunds.
Dividend Income and TDS: While dividends are taxable in the hands of the recipient, TDS on dividend distribution must be accurately reported to avoid mismatches with AIS data.
Documentation and Record-Keeping Accurate record-keeping is now more critical than ever. Taxpayers should maintain:
By following these detailed guidelines, taxpayers can ensure accurate reporting, avoid notices, and prevent delays in refund processing for FY 2024-25.
The Role of AIS in Capital Gains Reporting
The Annual Information Statement (AIS) is a comprehensive report issued by the Income Tax Department containing information from banks, brokers, and other financial institutions. It details all transactions such as share sales, mutual fund redemptions, and property transfers, helping taxpayers reconcile their capital gains. AIS acts as a reference to verify the reported income and ensures that TDS, STCG, and LTCG are correctly reflected. Taxpayers can use AIS to cross-check the accuracy of their filings, reducing the risk of mismatches, notices, or additional scrutiny.
How TaxBuddy Auto-Fills STCG/LTCG from AIS
TaxBuddy’s platform automatically imports data from AIS to pre-fill short-term and long-term capital gains in the tax filing forms. This integration reduces manual errors and ensures accurate reporting. By linking your PAN and financial accounts securely, TaxBuddy fetches relevant transaction details, applies the correct holding period, calculates applicable taxes, and populates the ITR with precise figures. This automation saves time, minimizes mistakes, and provides confidence that the filing is consistent with government records.
Example Workflow: Filing Capital Gains with TaxBuddy
Step 1: Login and Link Accounts Start by logging into your TaxBuddy account using your secure credentials. Once logged in, connect all your PAN-linked accounts, including your bank accounts, demat accounts, and investment portfolios. Linking these accounts ensures that all relevant capital gains transactions, dividends, and TDS entries are automatically fetched, reducing manual errors and streamlining the filing process.
Step 2: Import AIS Data TaxBuddy allows you to automatically import your Annual Information Statement (AIS) data. This includes short-term capital gains (STCG) and long-term capital gains (LTCG) transactions reported by banks, brokers, and mutual fund houses. The platform consolidates all your trades in one place, so you don’t have to manually enter each transaction. This step ensures completeness and accuracy in reporting.
Step 3: Verify Transactions Once your AIS data is imported, carefully verify each transaction. Check purchase and sale dates, asset types (stocks, mutual funds, real estate, etc.), and amounts. TaxBuddy highlights any discrepancies or missing data, allowing you to correct them before filing. Accurate verification at this stage helps prevent notices from the Income Tax Department later.
Step 4: Apply Exemptions If you have eligible exemptions under Sections 54, 54EC, or 54F, enter the relevant details in TaxBuddy. For example, you may claim exemptions for reinvestment in residential property, specified bonds, or other eligible assets. The platform automatically calculates the impact of these exemptions on your taxable capital gains, ensuring that you maximize tax savings while remaining compliant.
Step 5: Review Tax Calculations After entering all transactions and exemptions, review the auto-calculated tax liability for STCG and LTCG. TaxBuddy provides a detailed breakdown of taxable gains, exemptions applied, and net tax payable. This allows you to confirm that all entries are correct and that your tax liability is accurately computed.
Step 6: File ITR Finally, submit your ITR directly through TaxBuddy. The platform offers multiple e-verification options, including Aadhaar OTP, net banking, and Demat-based verification, enabling faster processing of your return. After filing, you can track your ITR status in real-time and receive updates on refunds or notices, all within the TaxBuddy dashboard.
This workflow simplifies the filing process and ensures accurate reporting of all capital gains.
What to Do in Case of an AIS Mismatch
If the AIS data does not match your records, TaxBuddy allows manual adjustments before filing. Mismatches may occur due to delayed TDS updates, incorrect broker entries, or missed exemptions. Taxpayers should maintain detailed transaction records, including contract notes, bank statements, and capital gains statements from mutual funds or brokers. TaxBuddy provides prompts and guidance to reconcile discrepancies, preventing potential notices from the Income Tax Department.
Cautions and Recent Updates on AIS Reporting
Recent updates include stricter verification of TDS credits and detailed reporting of intra-day trades. Taxpayers must be cautious about accurately reflecting all capital transactions, including gifts or inherited assets. Incorrect entries or missing exemptions can trigger notices, penalty interest, or delayed refunds. Platforms like TaxBuddy provide real-time checks and alerts, helping users comply with updated rules efficiently.
Conclusion
Capital gains reporting has become more transparent and automated with AIS integration and platforms like TaxBuddy. Accurate STCG and LTCG reporting ensures compliance, reduces errors, and streamlines refunds. For anyone looking for assistance in capital gains filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Can TaxBuddy auto-populate both STCG and LTCG in ITR forms? Yes. TaxBuddy can automatically populate both Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) in your ITR forms by importing data from the Annual Information Statement (AIS) and broker statements. This eliminates manual entry errors and saves time, ensuring that your ITR reflects accurate capital gains for FY 2024–25.
Q2. How do I verify my AIS for capital gains before filing? You can verify your AIS by checking the transaction details against your broker statements or bank records. TaxBuddy simplifies this process by providing a consolidated view of all AIS-reported capital gains, highlighting mismatches, and guiding you to correct any discrepancies before submitting your ITR.
Q3. What exemptions can I claim under Sections 54, 54EC, and 54F?
Section 54: Exemption on capital gains from the sale of residential property if invested in a new residential property.
Section 54EC: Exemption by investing gains in specified bonds (NHAI, REC) within 6 months of the sale.
Section 54F: Exemption on gains from any asset (other than a residential house) if invested in a residential property. TaxBuddy calculates eligible exemptions based on your inputs to maximize tax benefits.
Q4. Is TDS automatically reflected in AIS for all capital gains? Not always. While AIS captures TDS from most transactions, some broker-level adjustments, off-market transactions, or intra-day trades might not reflect immediately. TaxBuddy cross-verifies TDS data with your broker statements to ensure accurate reporting.
Q5. How do I handle mismatches between AIS and my broker statements? Mismatches can occur due to delayed reporting or errors. TaxBuddy identifies discrepancies, provides a step-by-step guide to reconcile them, and helps you make corrections before filing, preventing notices or delays in refunds.
Q6. Can I file revised returns if capital gains were reported incorrectly? Yes. Under Section 139(5), you can file a revised return if there’s an error or omission in reporting capital gains. TaxBuddy allows easy filing of revised returns, automatically updating previously reported details to reflect accurate gains and exemptions.
Q7. Does TaxBuddy provide support for intra-day or derivatives trading reporting? Absolutely. TaxBuddy supports STT-based and derivative trading transactions, auto-populating your gains and losses in the ITR. It categorizes them correctly, ensuring compliance under the Income Tax Act.
Q8. How long does it take for AIS data to reflect after transactions? Typically, AIS data reflecting TDS, capital gains, or dividend transactions takes a few days to a couple of weeks after trades are settled or TDS is deposited. TaxBuddy updates data automatically once the AIS is available for the assessment year, helping you stay on top of reporting deadlines.
Q9. Are inherited or gifted assets included in AIS reporting? Inherited or gifted assets are generally not pre-filled in AIS. TaxBuddy helps you manually input such transactions, calculate capital gains, and claim applicable exemptions while ensuring proper reporting in your ITR.
Q10. How does TaxBuddy ensure data security while importing AIS transactions? TaxBuddy follows strict security protocols, including end-to-end encryption, secure login, and read-only access to sensitive financial data. All imports from AIS, broker statements, and bank records are handled securely, protecting taxpayer information during ITR preparation.
Q11. Can I file ITR using JSON files directly in TaxBuddy? Yes. TaxBuddy allows seamless import of JSON files generated by ITR utilities. The platform reads the file, populates your ITR, checks for errors, and enables e-filing, reducing manual data entry and ensuring accurate submission.
Q12. How does using JSON files improve ITR filing accuracy? JSON files provide structured digital data directly from the Income Tax Department utilities or TaxBuddy’s platform. Using these files reduces manual entry errors, ensures all details match AIS records, and speeds up the filing process, while allowing the platform to automatically highlight mismatches or missing details before submission.
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