Capital gain tax on a gold jewellery if bought in return of

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2015 We we buy a new gold jewellery in return of old gold remained in family for decades, do we have to pay capitak gain tax on the return value of the gold inspite of the fact that we have a new jewellery more than the amount of that gold.

Please advise

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)
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29 June 2015 Yes. Even though you call it an exchange actually it is a sale because the value of the old gold must have been told to you and adjusted in the bill. Such value will the full consideration for computing the capital gain for sale of old gold.

Even if there is exchange it amounts to 'transfer' for the purpose of capital gain.

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2015 But in case of property, if we sell a property and buy a new one in place, than the amount is free from tax. I am giving a old gold and getting new gold in return. I am not making any profit as whatever was the profitm it got converted into same amount of gold. Please clarify.

What should be the way to avoid this taxation? Please confirm.

Thanks,

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)
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29 June 2015 When you sell property there is specific exemption under sec. 54. To avoid tax on capital gain from sale of gold you will have to buy either property to get benefit under sec 54F or capital gain bonds sec 54EC.

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