Income tax: How to calculate capital gains tax on sale of old jewellery
May, 02nd 2017
Q. Last year, I had sold my old jewellery which was given to me by my in-laws in 1990 on my marriage. I got Rs 4.26 lakh by selling the jewellery but I do not have any proof of the purchase price in 1990. How much capital gains tax is due and is there any tax exemption for this?
– Neelima Sharma
A. Capital gain is the excess of sale price over the cost of acquisition. In case of gifts, the cost of acquisition of the asset will be the cost to the previous owner. In the given situation, as the cost price is unavailable, the cost of acquisition will be its fair market value as on the date of purchase by your in-laws. This will be further indexed to make up for the inflation over the years.
Exemption from long-term capital gains can be claimed by investing in bonds issued by Rural Electrification Corporation Limited or National Highways Authority of India or by investing in a residential house property. These exemptions are available subject to fulfillment of certain conditions.
Q. My mother is 90 years old. We tried to get her Aadhaar card issued, but the system does not accept her fingerprints. How do we file her income tax returns in such a situation?
– Swati Kotwal
A. Since biometric device was not accepting your mother’s fingerprint while enrolling for Aadhaar number, the following options are available:- a) File the return of income before June 30, 2017 for this year. You might also want to see this:
b) Generally, the suggestion given by the Aadhaar helpline is to ask the operator to deactivate the fingerprint option from UID and process it with IRIS scan only. In this way, Aadhaar card will consist of name, address, government ID number and iris scan of eyes for bio-metric identification.