Sale of antique coins

Hi Prakash Sir,

I cant accept the view, because personal effects it is necessary to prove the personal nature of the asset...

Also items having archaeological value constitute an archaeological collection, which is not personal effect.

Dear Prakash Sir,

In general Collection of antique coins cannot be covered under personal effects because - COINS CANNOT BE SAID TO HAVE BEEN USED AS SUCH BY THE ASSESSEE which is very much an essential requirement for qualifying as a personal effects.

To qualify for a personal effect the article should be used for personal purposes

Articles must be legitimately and commonly used by assessee - Only those effects can legitimately be said to be personal which pertain to the assessee’s person. In other words, an intimate connection between the effects and the person of the assessee must be shown to exist to render them ‘personal effects’. The enumeration of articles like wearing apparel, jewellery and furniture mentioned by way of illustrations in the definition of ‘personal effects’ also shows that the Legislature intended only those articles to be included in the definition which were intimately and commonly used by the assessee - H.H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 (SC).

{Pls note that the above judgement was pronounced when jewellery was not specifically excluded from the definition of Personal Effects}

Daily usage is not essential - All personal effects need not be used daily. So long as they were meant for personal use, they will have to be considered as personal effects - Jayantilal A. Shah v. K.N. Anantharam Aiyar, CIT [1985] 156 ITR 448 (Bom.)

User only on ceremonial occasion - Merely because in view of nature of property it can be used on ceremonial occasions only, it does not follow that property is not held by assessee for personal use; thus, heirloom jewellery of ex-ruler which were used on ceremonial occasions and accepted as private properties by Ministry of State formed a part of personal effects of assessee-ruler and, therefore, are excluded from definition of term ‘capital asset’ - CIT v. H.H. Maharani Usha Devi [1998] 98 Taxman 309 (SC).

However I think,

 IF COINS ARE SUCH WHICH HAVE BEEN USED BY THE ASSESSE IN CEREMONIAL OCASSIONS AND ARE TRANSFEREED AS SUCH (LIKE INDIVIDUALLY) i:e NOT AS A COLLECTION (SINCE IT HAS BEEN SPECIFICALLY EXCLUDED) THEN IT CAN BE TREATED AS PERSONAL EFFECTS.

Can sumone pls clarify my doubt??

Amir Bhai,

To me a part of collection still is "collection"... :P

Pls see Q 98 in the below link.. It is a settled case, which could be against assessee in cases like this... I thought it was related to the case in hand and the question u asked...

https://www.incometaxindia.gov.in/questionbank.htm#H97

YES..... SALE OF ANTIQUE COINS SHALL BE CHAREGABLE TO CAPITAL GAIN.....SINCE ANTIQUE COINS ARE CAPITAL ASSETS AS PER SEC 2(47)......

THANKS AMIR

Dear Amir:

The Coins have not been used by the asssesee and have been given as gift to his ancestors. This seems interesting and bit confusing.

G.K. Bhai,

Thanks for bringing another angle to the discussion.............

Hmm..........if it is regarded as PGBP, then that closes the chapter as far as "Personal Effects"goes.

Interesting part is even a single transaction can be regarded as adventure in the nature of trade, so even if assessee sells all these coins in one go then who knows AO might still tax it as PGBP............:)

But I think we should not go into that, it is something very very confusing for me...........Judgements have held that No set criteria to distinguish between the two- depends upon the facts of each case

Prakash sir,

The coins are capital assets.

They are antique, which itself in my opinion is sufficient to treat the same as not being personal effects, irrespective of the degree of personal use, and irrespective of whether they have archaeological value...

Cost can be the FMV as on 01-04-1981 (if available,will need more details to confirm),

with indexation (if available,will need more details to confirm).

You can also get the CG exempt if the condition in sec 47(ix) is satisfied.

Regrds

Coins We are using regularly and after some years Reserve Bank discontinue that coins and new coins come in circulation the previous coin comes in collection which is antique after some period then how we will calculate tax on it when we sale these coins after a long period of 20 or 25 years which type of capital gain we will treat or can we purchase property from the amount of sale of coins