So I received some mutual funds in DEMAT form when my close relative died. I know it’s not taxable, but in my AIS, it shows up as:
Information Code: SFT-18(Pur)
Information Category: Purchase of securities and units of mutual funds
Information Description: Purchase of mutual funds (SFT - 018)
Information Source: COMPUTER AGE MANAGEMENT SERVICES LIMITED - DSP ASSET MANAGERS PRIVATE LIMITED(D) (AAACC3035G.AZ670)
What should I do about this? Should I give feedback on the AIS and deny the information in AIS or select this option and enter the PAN of the deceased person?
You can fill the feedback but important is only when you redeem.
You are not liable to be taxed when receiving but only when you redeem yourself, you need to calculate gain from actual cost of acquisition. The gain will be taxable just like it would have been if the deceased had redeemed it.
Until it is not realized there is no case actually.
if you pass it on to another family member, then you are out of loop. The next person who redeems it needs to compute gain from original cost of acquisition.
It is not about taxation but about marking it wrong. This sends wrong data to IT department and they may send notice, which could be avoided if this is reported properly as a transmission.
I forgot to add or maybe was not explicit enough, but as per the way they submit data, they seem to mark all off-market trx as purchase only.
They will not get involved in who was previous party and what was actual rate of acquisition etc. and whether its related party that isnt under tax ambit etc
You received units and then when you compute, you need to validite. If GIFT tax is applicable or not.
Also, IT is self-assessment tax if not audited, so anyway all those under this category are taken for word of mouth. (Trust basis)
Then it is upto IT to flag a return, for whatever reason they see.
Feedback form: neither assures that notice will not come anyway, nor prevents notice from being sent even if not sent in feedback.
Still, I advise you to seek guidance from CA as well. (they might charge fees )
You can provide feedback if the information is not correct in the AIS. There is no option to add feedback for the type of transaction in case the one reflected in AIS is not correct. The transaction relates to you so giving feedback that information related to other PANs is not recommended.
There is no tax on shares transferred to you in the event of death so for now you can let the information be as it is. When you sell the shares, you have to consider capital gain on the same.
