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My wife (first owner) and I (second owner) purchased some shares five years ago. Now she has sold these shares to me at market price without paying STT (off market transaction). Can she book long-term capital loss with indexation?
Ramesh Chandra Pal
Yes, technically this should be possible as long as you and your wife have individual sources of income and the shares have been acquired from your respective income.
What are the rules relating to advance tax payments for senior citizens?
MS Padmanabhan
As per Section 207 of the Income tax Act, 1961, the provisions relating to advance tax payments are not applicable to a resident individual aged 60 or more during the relevant tax year and who does not have any income chargeable under the head “Profits and gains of business or profession” (PGBP). Hence, advance tax compliance is not mandatory for a senior citizen not having income under the head PGBP.
My wife and I have jointly taken a housing loan for ₹30 lakh. Can my father-in-law and/or sister-in-law pay an amount of ₹5-10 lakh to the financial institution directly as pre-payment for our housing loan? How will this be treated as per tax laws vis-à-vis them transferring the amount to us first and, then, we pre-paying? Can this payment be treated as gift to us? What will be the tax implication?
Parag
The amount that you would be receiving from your father-in-law or your sister-in-law would be exempt from taxation in your hands as it will qualify as a gift from a relative as per the explanation to Section 56(2)(vi) of the Income-tax Act, 1961.
The said Section subjects any gift receipt to taxation under the head “income from other sources”, be it in cash or kind if it is for an aggregate amount exceeding ₹50,000 during a particular financial year.
In your case, since it is a gift from a relative, the entire receipt would be tax exempt. Further, the tax implication would not vary, irrespective of whether the payment is directly done by them or it is routed through you.
The writer is Partner, Deloitte, Haskins and Sells LLP. Send your queries to taxtalk@thehindu.co.in
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