Sale of jewelry: Income tax guidelines on positive aspects defined
Is long-term capital positive aspects from the sale of knickknack taxable for a person whose revenue is decrease than the fundamental exemption restrict? If sure, what’s the fee of tax on such capital positive aspects?
Answer: Jewelry is handled as capital asset and any revenue made on sale of a capital asset is taxed as capital achieve. It will be taxed as quick time period capital positive aspects or long run capital positive aspects relying on the interval for which the jewellery was held. The holding interval to make a capital asset is completely different from completely different class of capital belongings.
Profits on sale of knickknack are handled as long run if the jewellery is offered after three years else it turns into quick time period if offered inside three years. Such quick time period capital positive aspects are handled like your common revenue and taxed on the slab fee relevant to you. The long run capital positive aspects nonetheless are taxed at flat fee of 20% after making use of indexation.
In case the opposite revenue excluding such long run capital positive aspects is beneath the exemption restrict and in case you are a resident for tax functions, you might be allowed to set off such long run capital positive aspects in opposition to such quick fall and should pay tax solely on the steadiness long run capital positive aspects.
The fundamental exemption restrict, for normal class of taxpayers, is Rs. 2.50 lakh. However those that have accomplished 60 years and but to finish 80 years get pleasure from greater fundamental exemption restrict of three lakhs. Those over 80 years of age get pleasure from fundamental exemption as much as Rs. 5 lakh of revenue.
You can declare exemption from cost of long run capital positive aspects tax on jewelry in the event you make investments the online sale proceeds for buy of a residential home in India topic to fulfilment of sure situations.
The author is a tax and funding skilled and will be reached at jainbalwant@gmail.com
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