Applicability of Income Tax

Jewellery is a capital asset. So Capital Gain should be calculated on sale of jewellery. Entire sale consideration will not be taxable only the capital gain on sale will be taxable.

Interest on FD will be included in taxable income as income from other sources.

agreed with Arpita....

capital gain on jewellery sale

and interest of fixed deposit will be taxable

The profit part on sale of jewellery is taxable for you as well as when you make FD then interest thereon also be taxable for you.

Ashok,

Understand these are two different transections.

One is related Capital Assets and taxable under the head Profit and Loss of Capital Assets

Second is related to Investment in FD and taxable under the hear profit and loss from Income from Other Sources

@ Ashok..

agreed wih Saurabh. account for both.. Capital Gains and Income from Other Source.

Agree with the experts. How will the capital gains will be calculated. The jewellery si old and has been inherited. Say the sale value as on date is Rs. 300,000.00. How will the profit from sale be worked out ?

In case your ancestor had bought the ornaments before 1st April, 1981, then the cost of ornaments will be the fair market value (FMV) as on 1st April, 1981. You can obtain the FMV from a government approved valuer. Find out if your jeweller is an authorized valuer.

get indexed cost on the date of sale, as per the valuation done on basis of 1981 basis

1. The sale of jewellary shall be subject to capital gain. The amount of gain shall depend on the date of acquisition of the jewellary and shall be taxable as short term or long term as applicable.

2. The interest on Fixed Deposit shall be charged to tax under Other Sources.

3. If the Fixed Deposit is made in a Scheduled Bank for a period of 5 years or more, then you can claim a deduction u/s 80C of the Act in gross upto Rs. 1 Lakh.