My husband died in September 2012 while he was a director in a reputed company. The company gave me certain amount as ex-gratia compensation. Will such amount be taxable in my hands?
Prema Vasishst
The CBDT, through circular No, 573 dated August 21, 1990, has clarified that a lump sum payment made gratuitously or by way of compensation or otherwise, to the widow or other legal heirs of an employee, who dies while still in active service, is not taxable as income under the Income-Tax Act, 1961.
Further, reliance can be placed on a decision of the Mumbai Tribunal in the case of ACIT vs late Shri Anil Bhatia. Thus, it may be inferred that such an amount shall not be taxable in your hands.
I am working as project manager in a private limited company. On successful completion of a particular project, my employer gave me a gift voucher of R50,000. Will this be taxed in my hands?
Anup Tiwari
The value of any gift, or voucher, or token in lieu of which such gift received by the employee or by member of his household on ceremonial occasions or otherwise from the employer is taxable as a perquisite. Where the value of such gift, voucher or token, as the case may be, is below R5,000 in the aggregate during the previous year, then it is not taxed as perquisite. In your case, the value of gift voucher exceeds R5,000; therefore, the entire amount shall be taxed as a perquisite in your hand.
I am a senior citizen, aged 65 years, having pension income of R1,60,000 per annum and have earned short-term capital gains of R80,000 from the sale of shares of listed companies. Could you let me know whether I will be entitled for the basic exemption limit on short-term capital gains?
Girish Malhotra
As per the provisions of Section 111A, any short-term capital gain on transfer of shares where the STT has been paid at the time of sale will be taxed at 15%. Also, it provides for utilising the basic exemption to the extent it is not utilised by other incomes, against the short-term capital gains taxable under this section. As such, you can avail the benefit of entire basic exemption of R250,000 against your total income, including the short-term capital gains.
As your income is lower than the basic exemption limit applicable to senior citizens, that is, R2,50,000, you would not be required to pay any tax on your total income, including the short term capital gains.
I acquired a plot of land for R75,000 in May 1979. I am planning to sell this plot for R12 lakh. Kindly guide me on the cost of acquisition.
Sheshagiri Rao
As per Section 55 of the Income Tax Act, 1961, where a capital asset became the property of the assessee before April 1, 1981, the assessee has the option to take higher of the fair market value of the asset as on April1, 1981, or the actual cost of the asset as the cost of acquisition. Thus, you may take R75,000 or the fair market value of the plot as on July 1, 1981, whichever is higher as the cost of acquisition.
It may be noted that as per Section 55A of the Act where the assessing officer is of opinion that the value adopted by the assessee as on April 1, 1981, is higher than the fair market value as on that date, he can make reference to the valuation officer for determining the fair market value of the property.
The writer is founder of RSM Astute Consulting Group Send your queries at fepersonalfinance@expressindia.com
