What are the rules and limits on the sale of gold held in the form of jewellery/coins/bars, etc? Do I have to pay any taxes on the sales proceeds received? Is there a TDS cut?
M P Sinha
As per the Income-tax Act, jewellery/bullion (including coins, bars) held for personal purpose is considered as capital asset and any gain arising from the transfer of such capital asset is subject to capital gains tax.
In case such capital asset is held by the taxpayer for a period of up to 36 months before sale/transfer, then the same is treated as short-term capital asset and the gain is termed as short-term capital gain (STCG). In case such capital asset is held for more than 36 months before sale/transfer, then the same is treated as long-term capital asset and the gain, long-term capital gain (LTCG).
The STCG is taxed at the applicable slab rates for the individual without any indexation benefit for cost inflation. LTCG from sale of such capital asset is taxed at 20 per cent (applicable rate for FY 2016-17) after indexation.
Provisions of tax deduction at source are not applicable for sale of jewellery/ bullion. However, certain specified sellers (including individuals liable to tax audit u/s 44AB of the Act) are required to collect tax at source (‘TCS’) at 1 per cent in case of sale of jewellery and bullion in cash where the sale proceeds exceeds ₹5 lakh and ₹2 lakh respectively.
My mother is a Parkinson's patient. We have hired a help for taking care of her. Is the salary paid to the caretaker eligible for deduction under Section 80DDB? Also, would the cost of all medicines taken by her be deductible? I have a certificate from a neurologist as required by the IT Act.
Karthik Nagabhushan
As per the provisions of the Income-tax Act, a resident individual may claim deduction u/s 80DDB for amount paid for medical treatment of certain specified diseases (which includes Parkinsons disease)for himself or any dependent (which includes dependent mother). The amount of deduction is the actual expenditure incurred on medical treatment subject to a maximum of ₹40,000 (₹60,000 for medical treatment of senior citizen, that is, between 60 years or more but less than 80; and ₹80,000 for super senior citizens, thatis, 80 and above) subject to the certificate from the specialist.
The Section provides the deduction for the expenses associated with the medical treatment which may include hospital expenses, consultation fees of doctors, medicine expenses, any nursing expenses (if prescribed by the doctor) etc. Accordingly, in my view, salary expenses of the caretaker may not be strictly considered as eligible for deduction u/s 80DDB as the same is in the nature of expenses for attendant to take care of the daily needs of the patient.
The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in