Capital gain shall be calculated on the basis of the date of transfer of capital asset, i.e., the date of registering the sales deed.
My wife wants to take a gold loan by pledging old ornaments. As she will be unable to repay the loan, she will authorise the bank to get the outstanding amount liquidated by selling the pledged ornaments. Will she incur any tax liability for auctioning the ornaments by the bank?
When pledged jewellery is auctioned by the bank, long term capital gain (LTCG) may arise in the hands of your wife as the consideration has indirectly been received by her. Further, as per Section 55 of Income Tax Act, 1961 the fair market value of the jewellery as on April 1, 2001 may be considered as its cost of acquisition for the purpose of calculating the capital gain.
Is it compulsory for an NRI to file ITR every year in India although having no income at all in India?
-Name withheld
As per Section 139 of the I-T Act, an NRI is not required mandatorily to file ITR in India if he has not earned any income from India. However, there are certain conditions / thresholds prescribed under the Act — deposit, expenditure and other conditions prescribed under Rule 12AB of the Income-Tax Rules, 1962 which mandate ITR filing.
I am planning to sell my flat. How do I calculate LTCG on it? Will it be from the date of getting the possession or from the date of booking the flat? What are the costs that I can adjust while calculating the tax amount? Can I avoid LTCG tax if I invest the full amount in NHAI bonds?
-Vinod Auralia
Capital gain shall be calculated on the basis of the date of transfer of capital asset, i.e., the date of registering the sales deed. But in case the possession of the flat along with all other rights in property are transferred prior to the date of registering sale deed, the same shall be considered as the date of transferring the property. The date of booking of flat may not be material for this purpose. While calculating LTCG the following shall be deducted from sale consideration: Expenditure incurred wholly and exclusively for the purpose of transfer, indexed cost of acquisition, indexed cost of improvement.
As per Section 54EC, LTCG can be invested in NHAI bonds within a period of six months from the date of transfer to avail exemption, provided that the bonds are not transferred within a period of five years. Further, a maximum of `50 lakh can be invested in these bonds for the purpose of exemption.
I have incurred capital loss in derivatives trading. Can I set it off against my salary income?
-Akash Gupta
Capital loss from derivatives trading cannot be set off against income under the head ‘salary’.
How should I compute the tax on capital gains after selling units of mutual funds?
-Alok Prasad
Capital gains derived from sale of listed equity shares, units of equity-oriented mutual funds held for a period of more than 12 months results in LTCG which are taxable at the rate of 10% plus cess plus surcharge (if applicable), in excess of `1 lakh, with no indexation benefit. However, if held for 12 months or less, would result in short term capital gain (STCG) which is taxable at a rate of 15%.
I am planning to transfer some shares that I hold to my son this year. What will be the taxation of such transfers for me or my son?
—Praveen Kumar
From an income tax perspective, gifting moveable property (shares in your case) to relatives does not trigger taxation. Therefore, you may transfer shares to your son without attracting any tax liability in his hands. Further, when he finally sells these shares received as a gift, for the computation of capital gains, he shall be entitled to include in his period of holding, the period for which the shares were held by you. Moreover, the cost for which you acquired the shares may be treated as your son’s cost of acquisition.
Source: https://www.financialexpress.com/money/income-tax-your-queries-income-tax-ltcg-on-auction-of-gold-to-repay-loan-will-attract-tax-3317160/
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