Sale of old gold taxation
Stephen
(Querist) 08 January 2014
This query is : Resolved
Hi Experts in law & taxation,
I am a retired person having annual income through other source around 5Lakh PA and recently my spouse sold some old gold for 1.3Lakh and obtained a cheque from the jeweller and I deposited in my a/c. Does this amount to be taxed. If yes under what category and what would be taxable slab would this fall including the above mentioned source of income and what will be tax payable along with any applicable exemptions as this gold was original bought 4 years ago for 60,000.
Thanks in advance for your advice.
Devajyoti Barman
(Expert) 08 January 2014
Taxation query.
Better post in caclubindia.com.
R.K Nanda
(Expert) 08 January 2014
consult tax lawyer.
Rajendra K Goyal
(Expert) 09 January 2014
Capital gains have to be calculated and tax is to be paid accordingly.
consult your tax consultant.
T. Kalaiselvan, Advocate
(Expert) 12 January 2014
attracting capital gains tax liability, you may approach the tax consultant for proper advise.
Stephen
(Querist) 13 January 2014
Dear Kalaiselvan,
Thanks for this reply. Just was to clarify would the capital gains tax liability would it be for entire 1.3 laksh or would be just for 70,000. (i.e 1.3 - 60,000)as my original investment was 60,000.
Thanks
Stephen
Anirudh
(Expert) 14 January 2014
Dear Mr. Stephen,
Capital Gains = Sale proceeds minus indexed cost of acquisition.
For arriving at the indexed cost of acquisition, you have to first have proof to say as to when did you acquire the gold. Suppose you purchased it in the year 2000-01 (the index for that year was 406)
The index for the year 2013-14 is 939.
Therefore the indexed cost of acquisition is = original cost x current index divided by index in the year of acquisition.
Therefore as per assumption, the indexed cost of acquisition in your case would work out to be:
60000x939/406 = 138768/-
Sale proceeds = 130000/-
Therefore capital loss and not gain.
If you can exactly say in which year the gold was purchased, then depending upon that I will be able to work out and give you the capital gain as also the amount of capital gains tax payable on it.
Stephen
(Querist) 14 January 2014
Dear Anirudh,
Many thanks for this detail explanation along with tentative calculation. This gives me a good eye opener. The Gold which was purchased by way of cheque payment to the jeweler by my wife was in the year 2007 - 2008.
Hope this will help to arrive at capital gains taxable / payable.
Advance thanks for your help.
Stephen
Anirudh
(Expert) 14 January 2014
Index for 2007-08 was 551.
Applying the same, cost of acquisition would be:
Rs.60000x939/551 = Rs. 102251/-
Therefore capital gain = 130000-102251 = 27749. On which Long term capital gains tax @ 20% i.s. Rs. 5550/- is payable.
Rajendra K Goyal
(Expert) 14 January 2014
Well explained and advised by the expert Anirudh ji.
Stephen
(Querist) 14 January 2014
Dear Anirudh,
Many thanks for your kind help and reply. I hope when I fill IT E-returns for 2014-15. I can use this computation and how do I show proof for the same.
Once again thanks for your help.
Stephen
Anirudh
(Expert) 14 January 2014
Dear Mr. Stephen,
When you file your e-returns, you need not show any proof. But, you must keep the proof safely so that whenever they ask for you are in a position to produce.
