No tax implications for gifting gold coins

 







As the gold coins were held for more than 36 months, they will qualify as a long-term capital asset. The resultant gain/loss would be taxable as long-term capital gains/loss (LTCG/L) in your hands.

LTCG/L is calculated as the difference between net sale consideration (the actual sale consideration less incidental expenses) and the indexed cost of acquisition (ICOA) and improvement. The ICOA would be calculated as cost of acquisition/cost inflation index (CII) of FY2010-11 (i.e. 167) * CII of year of sale.

The tax is payable at 20% (plus applicable surcharge and cess) on the resulting LTCG.

A rollover exemption can be sought against this LTCG under Section 54F of the Income Tax Act by buying or building a residential property, subject to the prescribed conditions and timelines.

Transferring the gold coins by way of a gift would not give rise to any tax implications in your hands as the donor. Further, from the donee’s perspective, if you are a specified relative, then the transaction of gift would not give rise to any tax implications in the hands of the recipient as well.

Further, it would be advisable that any such gift be documented in a legal document viz. a gift deed and placed in the records. However, you should seek a legal opinion on the appropriate documentation and stamp duty implications (if any). The onus of proving that the transfer of gold coins between you and your relatives is a gift/irrevocable transfer would be on you and your relative and there should be robust documentation to support the claim.

As per the Payment of Gratuity Act, 1972 (POGA), an employee who is employed for wages in or in connection with an establishment to which POGA applies and rendered continuous service for not less than five years shall be eligible to receive gratuity.

Assuming that your Indian employer-employee relationship was terminated during your overseas deputation and POGA is not applicable to the overseas company, the services rendered by you overseas may not be considered for the purpose of counting of continuous service of five years for the purpose of gratuity.

However, the exact arrangement and terms of your employment with the Indian/overseas company may need to be evaluated to further comment on the same.

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the opti
Read more

Income Tax Return or ITR for FY20 Can Be Filed Till May 31

Image
  n the wake of severe Covid-19 pandemic, the Central Board of Direct Taxes (CBDT) has decided to extend timelines of various tax compliance dates on Saturday. “In view of the adverse circumstances arising due to the severe Covid-19 pandemic and also in view of the several requests received from taxpayers, tax consultants & other stakeholders from across the country, requesting that various compliance dates may be relaxed, the Government has extended certain timelines today," the ministry of finance said in a statement. The move is aimed at mitigating “the difficulties being faced by various stakeholders," it further added. The “relaxations are the latest among the recent initiatives taken by the government to ease compliances to be made by the taxpayers with the aim to grant respite during these difficult times," it mentioned in a notification. “It’s a welcome move to extend the timeline of various tax compliances as the country is struggling with severe second wave
Read more