New Delhi, July 3 -- Many taxpayers who sold listed shares or equity mutual funds during FY26 and earned less than Rs.1.25 lakh in long-term capital gains (LTCG) believe they can skip filing their income tax return (ITR) because no tax is payable on such gains. Tax experts, however, say this is one of the most common misconceptions around capital gains taxation.

The confusion stems from the Rs.1.25 lakh exemption available under Section 112A of the Income-tax Act. While the provision exempts eligible equity LTCG up to Rs.1.25 lakh from tax, it does not determine whether a taxpayer is required to file an ITR. The filing requirement depends on a person's total income and the applicable provisions of the Income-tax Act.

"There is no rule w...