30 June 2010
Can anyone tell me what will be the capital gain tax implications in the following case:-
An assesee get gold from his mother after her death. He then sold this gold in the market and obtained the cheque from the jeweller and introduced this amount as his additional capital in his proprietory business. Now is the assesee is liable to Capital gain tax on sale of gold? What will be the nature of capital gain tax i.e short term or Long term? And if yes then what would be the cost of acqusation and year of purchase of this gold as his mother was also the income tax payee but had not discloused this gold as her asset earlier.
30 June 2010
In the above mentioned case as per Section 49 date of acquistion will be the date on which the previous owner has purchased the gold. If his mother has purchased that gold before 1-4-1981 then FMV or actual cost whichever is higher will be considered as COA. To find out whether there will be Long term capital gain or short term capital gain you need to see the actual date of acquisiton of the mother or 1-4-1981 whichever is later.
As per Section 2(14) gold is a capital asset and it is better for him to disclose it to the Income Tax Authority now.
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