Bonjour, new guests from small-town India
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
If investment in a mutual fund is in “either or survivor” mode, who has to pay the capital gain tax? Do both parties have to share the tax burden or will the first holder alone be liable to tax?
W Sridhar
I understand that the mutual fund in your query is jointly owned and the mode of its operation is “either or survivor”, which would mean that either of the joint owner can make the decisions relating to the funds. In the event of death of one of the joint owner, the other joint owner can make decisions.
Based on the provisions of the Income Tax Act,relating to clubbing of income and the approach followed by the tax authorities, in case of jointly-owned investments, including mutual funds, any income arising from such investments shall be taxable in the hands of the person who has actually invested the funds. It is immaterial whether the person who has made the investment is the first holder of such investments.
For example, if you have invested in a mutual fund in the joint name with your spouse (where the spouse is designated as first holder), in the event of sale of such mutual funds, the capital gain shall be taxable in your hands.
In case the funds have been invested by both the joint owners, the income may be taxed in the hands of each joint owner in the same proportion in which funds have been contributed by them.
Further, the taxability of the mutual fund would depend on the nature of the mutual fund and the period for which it was held before sale.
What are tax rules related to purchase and sale of jewellery? Is sale subject to capital gains tax? Are indexation benefits allowed? I plan to sell my wedding jewellery.
R Gupta
According to the provisions of the Income Tax Act, jewellery is a capital asset and any gain arising from its transfer is subject to capital gains tax.
In case the jewellery is held by the taxpayer for a period of up to 36 months before sale/ transfer, then it is treated as short-term capital asset and the gain, short-term capital gain. If held for more than 36 months before sale/transfer, it is then treated as long-term capital asset and the gain, long-term capital gain.
Short-term capital gain from sale of jewellery is taxed at the applicable slab rates for the individual without any indexation benefit for cost inflation. Long-term capital gain from sale of jewellery is taxed at 20 per cent (applicable rate for FY2016-17) after indexation.
I understand that you intend to sell the jewellery received by you as gift for your wedding. While calculating the capital gain from sale of gifted jewellery, the cost of acquisition shall be the cost to the previous owner, that is, the person who has gifted it to you. Also, the period for which the jewellery was held by the previous owner is also considered for determining the nature of capital asset.
The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
Citroen’s first vehicle sports a novel design and European interiors. It is also meant to be as comfortable as ...
The pandemic is only the tip of the iceberg that the country’s cash-poor airlines — both regional and national ...
The government is yet to specify the framework of its recently announced old vehicle scrappage policy
Here is a checklist that equips you to discern the market nuances
Sensex, Nifty 50 have witnessed sharp decline
The fund has consistently outperformed S&P BSE 100 TRI over one, three and five years
Returns are superior to immediate annuity plans, but SCSS can secure better rates for new investors sooner if ...
With the public looking beyond mainstream media for reports from the ground, independent digital platforms are ...
A book on Badri Narayan is a tribute — albeit a belated one — to an artist who did not enjoy the recognition ...
The country hasn’t had a quiet moment since the military seized power on February 1
The Tatmadaw sees itself as an embodiment of the nationalist soul of Myanmar. But their brand of nationalism ...
Its name is the starting point of a brand’s journey and can make a big difference in the success sweepstakes
Sober spirits are the in thing
A peek into where ad spends went last year and where they are headed tomorrow
Can Swiggy Instamart disrupt the ecommerce groceries space, currently ruled by the Amazons and Big Baskets? ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor