I have inherited some gold ornaments from my parents. Now, I want to sell these and invest the money elsewhere. Is it taxable? How should I calculate the gains?
Rafi Alam, Calcutta
Yes, you will have to pay capital gains tax. If the ornaments are with you or your parents for more than three years, you shall have to pay capital gains tax at the rate of 20 per cent. However, you can get the benefit of cost indexation. The indexed cost of acquisition can be calculated as: actual purchase price x (cost inflation index of the year of sale/cost inflation index of the year of purchase). The capital gains will be the difference between the sale price and the indexed cost of acquisition. The cost inflation indices for different financial years are available at the website of the income tax department.
Options for mom
My mother is a senior citizen. Her gross annual income from post office monthly income scheme and bank fixed deposits is Rs 1,20,000. She wants to open a PPF account and also invest a small amount in a balanced mutual fund scheme. Will she have to submit income tax return? She has been submitting Form 15H for the last five years.
Ujjal Das, Ariadaha
No. She need not submit income tax return because her annual income is less than the threshold taxable income for senior citizens. If she opens a PPF account, she can claim deduction on the subscription amount in any year in which her annual income exceeds the threshold level. For investing in a balanced fund, she won’t require to file an income tax return. However, get her a PAN. That may be needed.
Take a break form tax
I am a senior citizen having a pension income of around Rs 1,50,000 per annum. I also have short-term capital gains of around Rs 30,000. Do I have to pay tax and file tax return?
Rajarshi Dasgupta, Calcutta
Your annual income, including the short-term capital gains, is Rs 1,80,000, which is less than the minimum taxable annual income for senior citizens. So, you don’t have to pay any tax or file return.
If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: email@example.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.