Capital gain tax on sale of jewellery

yes ur mom is liable to file I T Return

 If  the total income of ur mother for one financial year includes income from any other sources( Salary, rent, business etc) and such income (Other than capital gain )  is below exemption limit which is not chargable to tax, then long term capital gain amount  shall be reduced to the extent of exemption limit but If there is no other income other than Longterm capital gain then on  total capital gain amount tax shall be charged @ 20%   for example :

i)  Income from capital gain    Rs 256000/

ii) Income from any other source   Rs.  25000/

Total income ( i+ii)                            Rs.281000

Tax liability for FY 2012-13 (281000-200000)=81000 Tax @20% =16200/

If she has no other income except capital gain She will not get the benefit of basic exemption limit 

Tax shall be charged @ 20% on total capital gain amount  i.e. 256000 x20% = 51200/= 

This position is very clear under the act

 A.K. Singhal

Sr Advocate

Basic exemption limit can be availed even you have no other income except capital gain, but Chapter VI A deduction can not be availed.  If you have business or other source income, if your income except capital gain after deduction of VI A is less than basic exemption, then the remaining amount can be deducted in capital gain.  you can check the same in ITR 4 of income tax dept excel format..

I am in full agreement with Shri M. R. K. Prasaad ji.that "Basic exemption limit can be availed even you have no other income except capital gain, but Chapter VI A deduction can not be availed". Inhis casecalso there is no income other then Long Term Capital Gain.

But I vry humbly disagree with the views expressed by Shree Arvind Kumar Singhal ji that "... but If there is no other income other than Longterm capital gain then on  total capital gain amount tax shall be charged @ 20% " As per provisio to  section 112(1) of the I. T. Act 1961, ".....t where the total income (i.e. Capital gains Rs 2, 56, 000+Income from other sources as nil) reduced by such long-term capital gains i.e. remaining income from sources other than capital gain ( in the present case it is Nil) is below the maximum amount which is not chargeable to income-tax, Rs. 2, 00, 000  - Nil or ZERO  is by all meanings is below  the maximum amount which is not chargeable to income-tax then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax  ( in our case it falls short of full Rs 2, 00,000 )and the tax on the balance of such long-term capital gains (Rs. 2, 56, 000-2, 00, 000) = Rs 56, 000 only, shall be computed at the rate of twenty per cent.

I want to stress on the point that there is no mention in secion 12(1) prov.that  .... If there is no other income other than Long term capital gain then on  total capital gain amount tax shall be charged @ 20% "

The benefit shall be available in the Capital Gain Tax liability to the extent of Short fall even if the income from sources other than Capital Gains is Nil. 

Hence: the tax liability of your mother is rightly calculated to be Rs. 11, 200 + EC@3% being Rs. 336 omly.

I also endorse the view taken by Shri M. R. K. Prasaad ji that ...."if your income except capital gain after deduction of VI A is less than basic exemption, then the remaining amount can be deducted in capital gain" althogh is not relevant in this case.