Long-term capital gains tax (LTCG) on inherited Gold is calculated after adjusting the indexation benefits. Also, the holding period of the gold will be calculated from the actual date of purchase, not from the date it was passed on and became an inherited gold asset. But what if the date and cost of purchase of such Gold by ancestors is not known to inheritor? How is the LTCG from sale of such inherited Gold which is held by inheritor for more than 3 years taxed? And how is that LTCG calculated?
11 Replies
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 08 June 2022
Take FMV as on 1.4.01 as your cost of acquisition.
Anand Majmundar
(28 Points)
Replied 08 June 2022
Thank you for a prompt response. And what if I have inherited after 1.4.01?
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 08 June 2022
Even if inherited after 1.4.01 , date of purchaser will be considered.
Anand Majmundar
(28 Points)
Replied 08 June 2022
LTCG in such a case will be taxed at flat 20 pc. No indexation. Right? Thank you.
Shaikh Firoz
(37 Points)
Replied 08 June 2022
For the purpose pf jwellery and gold we should take
Invoice value or
Market value or
Valuation by merchant banker
but whenever you take this value contact to assessing officer otherwise case will open under assessment
Invoice value or
Market value or
Valuation by merchant banker
but whenever you take this value contact to assessing officer otherwise case will open under assessment
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 08 June 2022
Indexation benefit will be available.
sabyasachi mukherjee
(27579 Points)
Replied 12 June 2022
Gold transformed into wearing bangles and inherited .After the same if it is sold is not capital gain. This is an exception.
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 12 June 2022
Jewelry is treated as capital asset and any profit made on sale of a capital asset is taxed as capital gain. It can be taxed as short term capital gains or long term capital gains depending on the period for which the jewelry was held. The holding period to make a capital asset is different from different class of capital assets.
Profits on sale of jewelry are treated as long term if the jewelry is sold after three years else it becomes short term if sold within three years. Such short term capital gains are treated like your regular income and taxed at the slab rate applicable to you. The long term capital gains however are taxed at flat rate of 20% after applying indexation.
Profits on sale of jewelry are treated as long term if the jewelry is sold after three years else it becomes short term if sold within three years. Such short term capital gains are treated like your regular income and taxed at the slab rate applicable to you. The long term capital gains however are taxed at flat rate of 20% after applying indexation.
Anand Majmundar
(28 Points)
Replied 12 June 2022
What would be the reference source for calculating indexation? Thank you.
sabyasachi mukherjee
(27579 Points)
Replied 14 June 2022
Rashmi
I am giving a simple example.
You might be wearing bangles(gold).
if you sell the bangles it's not capital asset.
I am giving a simple example.
You might be wearing bangles(gold).
if you sell the bangles it's not capital asset.
Anand Majmundar
(28 Points)
Replied 26 August 2022
Is the sale of Diamond jewellery treated same as Gold? Will indexation apply there too in case it is inherited?
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