My employer has issued Form 16 wherein only salary details are mentioned and income from other sources such as interest is not shown. Therefore I am not in a position to fill Schedule TDS 2 of ITR 1( page 2 ).

Income from other sources related to interest on monthly income scheme and postal authorities has not recovered tax at source.

But my employer has recovered sufficient amount as tax from my salary and remitted to government account and advised me to claim refund from tax authorities.

Kindly let me know, am I in order of not filling Schedule TDS 2 column of ITR at the time of submission of Income Tax returns.

— A.G Sreekumar

“Schedule TDS 2” in ITR -1 applicable for A.Y. 2012-13, is to be filled in the case were TDS has been deducted on any income other than salary whereas “Schedule TDS 1” is to be filled in case TDS has been deducted on salary. In case no TDS has been deducted, the schedules are not required to be filled.

We understand that in your case TDS has been deducted only on salary income and no TDS has been deducted on interest income. In such a case, only “schedule TDS 1” needs to be filled in with the amount of TDS deducted by your employer. Schedule TDS 2 need not be filled.

Please note that the interest income needs to be declared in the return form in the row “Income from other sources” on the first page of the ITR1.

It is also advisable to verify your tax deducted at source as shown by the employer using Form 26AS. For further details, please refer to the instructions for filling up ITR 1.

I got married in 2006. At the time of the wedding, my father gifted me jewellery worth Rs 6 lakh. The same is reflected on my balance sheet.

However, since then I have not paid any capital assets tax nor have I got my jewellery valued.

My question is, if I get my jewellery valued how much tax will I have to pay considering no tax has been paid in last 6 years.

— Deepi

According to the Income Tax Act, 1961, any gift received by an individual on his/her marriage is exempt from income tax. Further, gift from relative is also exempt from tax. Definition of relative includes father besides others according to the definition given in the Income Tax Act.

We understand that your father gifted you jewellery worth Rs 6 lakh in the year 2006 on the occasion of your marriage. Hence, the same is exempt from Income tax in your hands. In the hands of your father, gift is not regarded as transfer and hence not included as capital gains.

No income-tax is payable by you on the valuation of the jewellery. Income-tax shall be levied only when you sell the jewellery since jewellery is a capital asset.

However, according to the Wealth Tax Act, 1957, a person is liable to pay wealth tax at the rate of 1.03 per cent on net wealth exceeding Rs 30 lakh as on the last day of the financial year (i.e. net wealth as on March 31). Net wealth includes building and land appurtenant thereto, motor cars, jewellery, bullion, furniture, utensils or any other article made of precious metals, yachts, boats aircrafts, urban land and cash in hand subject to specified exclusions. Hence, if your net wealth exceeds Rs 30 lakh as on the last day of the financial year including the above mentioned jewellery, you will be liable to pay wealth tax on the amount over Rs 30 lakh. Valuation of jewellery for the purpose of wealth tax is done on the last day of each financial year according to the prescribed rules.

(The author is a practising chartered accountant.)

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