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Income Tax: Sold gold? Pay short-term capital gains tax at slab rate

Long term gains shall be taxed at the rate of 20% and short term gains shall be taxed at applicable slab rates.

By Chirag Nangia

How is tax on sale of gold coins calculated and where do I mention the sale?

-Manoj Awasti

Income arising from sale of gold coins shall be taxable under the head 'income from capital gains'. The gains shall be long-term or short-term depending upon the period of holding of the coins. If the coins have been held for a period more than 36 months then the gains shall be treated as long term, else short-term. Long term gains shall be taxed at the rate of 20% and short term gains shall be taxed at applicable slab rates. The gains shall be computed by deducting from the full value of consideration, the cost of acquisition and cost of improvement. The benefit of indexation shall be available if the coins are held for more than 36 months. If the coins have been received as gift or will or on account of inheritance, the cost of acquisition of the previous owner shall be taken as the cost of acquisition.

If I do a fixed deposit in my daughter’s name, do I have to pay tax on the interest from the deposit?

-D Chandramohan

Income arising or accruing to a minor child (below 18 years of age) is clubbed in the hands of the parent whose income is higher, unless the same is derived from performance of an activity involving application of his/her skill or talent. If your daughter is a minor, interest income from FD shall be clubbed in your hands or your spouse's whoever's income is higher. However, if your daughter is not a minor, then the interest income shall be treated as her own income and she shall have to pay tax on it. A benefit of Rs 1,500 per annum is available to such parent as an exemption from the total taxable income.

I am a freelancer and work from home. Is it essential for me to pay tax on my income every month, or can I do it every six months for the total income?

-S R Rao

Income tax is required to be paid annually at the end of the financial year (on or before March 31), on annual income. However, you shall be required to pay advance tax on quarterly basis if your tax liability for a financial year is Rs 10,000 or more.

My uncle passed away last month. Can I file his income tax returns next year in July?

-G D Rajpal

The legal heir/ representative of the deceased shall be liable to file the return on his behalf for the income earned till the date of death. Legal heir has to register himself at the income tax website for filing the return on behalf of deceased. The income tax return of the previous year has to be filed on or before July 31 of the relevant assessment year. Any income earned after the date of death from the assets inherited from the deceased is taxable in the hands of the legal heir.

The writer is director, Nangia Andersen Consulting Pvt Ltd