Sam
1
Sir,
I have recntly sold some ancestral gold for about 8 lakhs. The jeweller paid me cash. My question is: 1. whether the sale amount would be subject to income tax. 2. Can I deposit the cash sale proceeds in my bank account all at once as I will declare it in my income tax return. 3.What documentation would be required to support my claim?
Gold is considered as a capital asset and income has to be paid on the capital gains arising.
Following calculation needs to be used to compute the gain amount:
Purchase Year = A
Purchase Cost = P
Cost Inflation Index (CII) for purchase year = X
Sale Year = B
Selling price = Q
CII for sale year = Y
Indexed Purchase price = P x (Y/X) = R
Long term capital gain = Q - R = S
Income tax on capital gain = S x 20%
To save this income tax, whole Q has to be invested into a house property within two years of sale or this amount has to be invested into capital gain bonds for three years.
