Can I show exit load as a loss while filing ITR?

If there is a gain of ₹10,000 and 1 per cent exit load on it, one receives ₹9,000 instead of ₹10,000. While filing Income Tax Returns (ITR), can one show this 1 per cent (₹1000) as loss and ₹8,000 (₹9,000 Minus ₹1,000) as the gains. In this case, the exit load is shown as a loss. Is this is a correct way or this exit load will not be considered as loss and it will not benefit the investor in any way? Please guide.
- Rekha

The exit load is a penalty levied by a mutual fund scheme for redeeming the investments before a stipulated period. You cannot treat it as a loss and deduct the amount from your gains once again while filing your ITR. The money you receive from the fund house (redemption proceeds) has already deducted the exit load. When you calculate your capital gains tax on this amount, you have already factored in the exit load. You cannot deduct the exit load once again from your gains while filing Income Tax Returns. Also, your calculation is wrong. The exit load of 1 per cent on your gain of ₹10,000 is ₹100, not ₹1,000 as you have calculated.

This article was originally published on April 18, 2016.