I have been investing in shares of listed companies for the last two years. I plan to sell some of these shares and purchase jewellery for my daughter’s wedding. What would be the tax liability if I sell them?
—Atul Mathur

Under the Income-Tax Act, the taxability on sale of shares of a listed company will mainly depend on the period for which you have held these shares. Where the holding period is more than 12 months, the gain arising on the sale of such shares is tax-exempt if sold through recognised stock exchange and securities transaction tax (STT) is paid. Where such shares are held for a period of 12 months or less, the gain is treated as short-term capital gain, taxable at the rate of 15% (plus applicable surcharge and education cess) if such shares are sold through a recognised stock exchange and STT is paid.

My husband gifted me R8-lakh cash on our wedding anniversary. Out of this money, I purchased gold jewellery in 2014. Now I wish to sell the jewellery. How will the capital gain be taxed?
—Smita Menon

As per provisions of Section 64(1) (iv) of the income tax Act, all income arising from assets transferred directly or indirectly to spouse without adequate consideration shall be liable to be clubbed with the income of the transferor. The conversion of one form of property to another will not make any difference. As such, the capital gain arising on sale of jewellery shall be included in the income of your husband and taxed accordingly.

I want to file my wealth tax return this year. Do I need to attach any document, such as a copy of the valuation report?
—Prakash Singh

Please note that the CBDT (Central Board of Direct Taxes) in its circular dated 23rd June, 2014, has amended the Wealth Tax Rules, 1957. As a result, from assessment year 2014-15 onwards wealth tax return has to be filed in Form BB instead of Form BA, as required earlier. The return shall be annexure less, i.e., it is not required to be accompanied by any statement showing the computation of the tax payable on the basis of the return, or proof of the tax and interest paid, or form of report of valuation.

What are the tax implications if I keep my flat unoccupied and stay in a rented house?
—Nitin Rathi

As per Section 23 of the Income-Tax Act, if a person owns more than one house, the the annual value of one of the houses, of his choice, can be considered as nil and the annual value of the other house(s) shall be determined as prescribed for the purpose of computation of income from house property. However, in your case, as you own only one house, there shall be no tax implications in this regard unless the said property is actually rented out.

I have a question regarding leave travel concession (LTC). Can I claim exemption in respect of the travel expense incurred by my brother?
—Manoj Saini

The definition of ‘family’ for the purpose of LTC includes brothers who are wholly or mainly dependent on the individual. The exemption is not available if the family members are traveling separately, without the employee who is not on leave. Also, the exemption is limited to the actual expenses incurred on the journey (which is strictly limited to expenses on air fare, rail fare and bus fare only). Thus, you can claim the exemption limited to the actual expenses incurred on the journey subject to the fact that your brother is wholly dependent on you.

By Suresh Surana

The writer is founder of RSM Astute Consulting Group

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