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Capital gain

yogesh sheth (director) (94 Points)

12 July 2015

Respected Seniors, Can you please suggest me that if I sell silver and gold received from my ancestors (having no documentary evidence ) and purchase a flat from the proceeding and my savings . In this circumstances will I be responsible to pay capital gain on the sale value after indexation or not have to pay any capital gain as I have purchase flat with it. Secondly if invest the amount in capital gain saving bond the amount will be total sale proceeds or the taxable amount after indexation. Regards, YOGESH SHETH

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8 Replies

Kuldipsinh Jadeja (Job) (357 Points)
Replied 12 July 2015

Is it a personal asset i.e used for personal purpose like jewellery, wearings etc. ?

Nihar Ranjan Rout (CA Final & CS Final) (577 Points)
Replied 12 July 2015

The gold / jewellery is of personal nature hence no capital gain is attracted.

CA Ankur Gupta (LLB Hons.) (Tax consultant) (56 Points)
Replied 12 July 2015

Capital assets include jewellery held for personal use and transfer of such attract tax on capital gain

Z ( ) (2960 Points)
Replied 12 July 2015

Capital asset does includes jewellery as told by Sir Ankur Gupta.

Capital gain shall arise but exemption may be claimed u/s 54F [buying house property] or 54EC [bonds]. Go through the conditions of these provisions.

For claiming exemption u/s 54F , entire net proceeds need to be invested and not merely the capital gain. Whereas u/s 54EC , capital gain is to be invested

I Would like to know how have you computed the value of Indexed cost of acqusition of the ansectral jewelley(Gold/silver).

CMA Poornima Madhava (CMA) (13097 Points)
Replied 12 July 2015

I too agree with Ankur bcoz gold/silver from ancestors is treated as jewellery which is a capital asset and gain from sale of such asset is taxable. If such jewellery is held for >36 months, it is a long term capital asset, in which case u can claim exemption u/s 54F (flat) or 54EC (bonds) subject to certain conditions.

Amount of exemption u/s 54F: investment in new asset/net sale consideration x capital gain

Amount of exemption u/s 54EC: Investment in the new asset or CG, whichever is lower.

https://www.charteredclub.com/section-54/

karan jit singh (Consultant) (1299 Points)
Replied 12 July 2015

On silver capital gain is exempt But on gold , u have to show in itr that u have deposited the sum of cg on sale of gold in house or eligible bond to claim exemption