Any transfer of jewellery subject to capital gains tax in hands of seller

Oct 23 2012, 03:30 IST
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SummaryI went to Germany on an eight-day official tour and extended my stay (as a vacation) for three days.

I went to Germany on an eight-day official tour and extended my stay (as a vacation) for three days. I was accompanied by my wife and son. All expenses, including travel fare, will be borne by my company. How much amount will be treated as perquisite in my hands?

Rajender Pradhan

Any expense incurred on an employee during the official tour is not treated as a perquisite. However, when it is extended as a vacation, expenses on the employee during the vacation period (boarding, lodging and local tours) and all expenses for the entire period, including the official tour period on the members of his household who accompanied him, will be treated as perquisite.

My friend sold me her gold jewellery for R3.5 lakh (market value R4.25 lakh) and after holding it for eight months, I sold it to another friend for R4.15 lakh. How will capital gain be taxed?

Aparna Kamath

As per income tax laws, any transfer of jewellery is subject to capital gain tax in the hands of seller (that is, your friend). The gain may be either short-term (if the holding is up to 36 months) or long-term, depending on the period of holding. At the same time, the inadequate consideration (i.e., difference between the market value of jewellery and the value at which it was sold, if it exceeds R50,000) will be taxable in the hands of buyer (that is, in your hands) as income from other sources. As such, the gain of R75,000 shall be subject to tax as income from other sources in your hands as per the slab rates applicable in your case.

Later, when you sell it to another friend, for computing the cost of acquisition in your hand, it will be sum of the purchase price and the deemed income taxed in your hand at the time of purchase, that is R 4.25 lakh. As the sale value is R4.15 lakh — that is, less than your deemed cost (R4.25 lakh)— there will be no gains in your hands.

I am a salaried employee. I have not filed I-T returns for FY12. My employer has deducted TDS on salary and with respect to other income of R10,000. I directly paid the tax on July 30, 2012. Do I have to pay interest for delay if I file the ITR now?

Roopak Sen

Interest for delay in filing returns is charged under Section 234A. Interest is

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