The Telegraph
Monday , January 28 , 2013
Since 1st March, 1999
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Keen on equity

I am a salaried individual looking to invest in the Rajiv Gandhi Equity Savings Scheme. I am a taxpayer in the 10 per cent tax bracket. I would like to know what tax benefits I would get if I invest in the scheme? Also, are there any upper limits of the amount of investment?
Soumen Mondal, Calcutta
The Rajiv Gandhi Equity Savings Scheme is aimed at first-time investors who are looking to earn higher returns from the equity market. In addition to the higher returns, there are also tax benefits associated with the scheme. If you have a gross total income of less than or equal to Rs 10 lakh, a maximum of Rs 50,000 is eligible for tax benefits, irrespective of your total investment. With a tax deduction of 50 per cent (that is, a maximum of Rs 25,000), your tax savings from the scheme would be Rs 2,500 if you are in the 10 per cent tax bracket. There are no limits on the investment.
Capital gains
I purchased a flat in January 2007 for Rs 20 lakh. If I sell the flat now, I will be getting Rs 62 lakh. What would be my long-term capital gains?
S Pal, Salt Lake
Long term capital gain on sale of property is computed under Section 48 of the Income Tax Act. It is the difference between your sales consideration and the indexed cost of acquisition of the property. The cost inflation index in 2006-07 was 519 and the same in 2012-13 is 852. So, your long term capital gains is Rs 29,16,763 (Rs 62,00,000 - Rs. 20,00,000 x 852/519).
Gift from brother
My brother is going to gift me a cash amount of Rs 5 lakh. Is it liable to tax? If so, which form needs to be filled?
S. Jalan, Calcutta
Under Section 56 (2) of the Income Tax Act, gifts made by relatives, which includes brother, is not taxable in the hands of the recipient. So, your gift is not taxable and you do not have to file returns for the same.
If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to:, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.