You are currently viewing Tax Queries Demystified: LTCG on Auctioned Gold, NRI ITR Filing, and Flat Sale Calculations

Tax Queries Demystified: LTCG on Auctioned Gold, NRI ITR Filing, and Flat Sale Calculations

In the scenario where pledged jewelry is auctioned by the bank to recover outstanding loan amounts, it’s essential to note that long-term capital gains (LTCG) may arise for your wife. The consideration indirectly received from the auction triggers this liability. Section 55 of the Income Tax Act, 1961, stipulates that the fair market value of the jewelry as of April 1, 2001, may be considered as its cost of acquisition when calculating capital gains.

NRI Tax Filings: Mandatory or Conditional?

According to Section 139 of the Income Tax Act, NRIs aren’t obligated to file income tax returns in India if they haven’t earned any income within the country. However, specific conditions and thresholds outlined in Rule 12AB of the Income-Tax Rules, 1962 may necessitate filing, particularly concerning deposits, expenditures, and other prescribed conditions.

Calculating LTCG on Flat Sale: Dates, Costs, and Exemptions

When selling a flat, the calculation of long-term capital gains (LTCG) is anchored in the date of transferring the property, typically the date of registering the sales deed. The possession date may be relevant if transferred before the deed registration. Deductible from the sale consideration are expenditures exclusively for the transfer, indexed cost of acquisition, and indexed cost of improvement. Section 54EC provides an avenue to potentially avoid LTCG tax by investing the full amount in NHAI bonds within six months of the property transfer. It’s important to note that these bonds should not be transferred within a five-year period to avail of the exemption, with a maximum investment limit of ₹50 lakh.


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