12 September 2013
1 lady aged 90-95 yrs came from pakistan to India before 1947 with 2kgs gold. she has 9 children. she wants to gift this gold to them. and they want to sell it so as to convert the amount into white money. what all are the taxability provisions and papers deeds required to be made?
12 September 2013
As per IT rules gift from relatives are exempt from tax...
As per the Income tax act, the Gifts received from any of your relatives are fully exempt from tax. Whether you are received the gifts as Cash, Cheque or any goods. You are not liable to pay the tax for these gifts.
Here the “relatives” term defines by the Income Tax act as follows :
Parents of the individual
Spouse of the individual
Brother or sister of the individual
Brother or sister of the spouse of the individual
Brother or sister of either of the parents of the individual
Any lineal ascendant or descendant of the individual
Any lineal ascendant or descendant of the spouse of the individual, Spouse of the
13 September 2013
But when her children will sell the gold, the transaction will suffer from capital gain tax? taking the cost of acquisition as cost or FMV on 01.04.1981 whichever is higher. Also I would like to mention that the lady has not filed wealth tax return too. So filing wealth tax return is compulsory first or she can give gift directly by making gift deed and when they will sell it, will have to pay LTCG??? What will be the correct process?
13 September 2013
Fmv on 1981-82 as cost of acquisition and if the gold gifted after 1981-82 then FMV will be considered as cost.. other wise the previuos owner cost..
If the gold are sold it will be taxed under long term capital gain than..
Hence, exemptions is allowed under Sec 54F and 54 EC.
13 September 2013
Sir, one more question plzz....if amount is deposited in deposit scheme as applicable under 54F...can this amount be withdrawn provided no tax to be paid at that time too..? If yes, then after how many years..?
CAclubindia
