24 February 2013
I am having 100 silver one rupee old coin gifted by grandfather who is no more.I am planning to sell and checked out its rate around 1100 rs. Per coin but the value is much higher as only 11gm silver is the only weight of each coin may be its antique.How the tax will be calculated on this
25 February 2013
Its Taxable (Because Silver Coins are Specially excluded in personal Effect definition)
As per Section 2(14) of the Income-tax Act, ‘personal effects,’ excluding jewellery, are not treated as capital assets and hence any gain arising on their transfer cannot be made liable to capital gains tax.
‘Personal effects’ would include movable property such as wearing apparel, furniture, household articles, utensils, vehicles, etc. held for personal use. Jewellery which has been excluded from ‘personal effects’ would include ornaments made of gold, silver, platinum or any other precious metal, precious or semi-precious stones and any articles set in any such stones.
25 February 2013
Silver Coins qualifies to be a capital asset according to the tax laws in India. Any income arising from its sale will be taxed as capital gains.
In view of the fact that the capital asset is held for more than 36 months, the gain from its sale would be taxable as long term capital gains and benefit of indexation will be available.
The amount received on sale of Silver Coins is regarded as full value of consideration in order to compute the capital gains. Fair Market Value of Silver Coins as on April 1,1981 can be considered as the cost of acquisition of the assessee since the asset was acquired prior to April 1,1981. There are authorised valuers who can assist in calculating this value.
Capital gains so computed may be claimed as exempt in case it is invested in accordance with the terms and conditions as specified under section 54EC (i.e. the gain is invested in the long term specified asset) or/and section 54F (i.e. purchase/construction of residential house) etc. of the I-T Act, 1961.
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