A taxpayer might get certain exemption if investment is made in specified assets.

By Chirag Nangia

What is the tax treatment for selling gold ornaments?
–Ajay Sharma
Income arising on sale of gold ornaments shall be taxable under the head “Income from Capital Gains”. The nature of capital gain (i.e. short term or long term) shall depend upon the period of holding of the ornaments. Income from ornaments held for less than three years, being short term gains, shall be taxable at applicable slab rates, whereas, in other cases, a rate of 20% shall apply (after indexation of cost of acquisition). A taxpayer might get certain exemption if investment is made in specified assets.

I am claiming tax deductions on home loan for the past 10 years. I intent to prepay the amount next month. Can I claim HRA benefit after that?
—S K Nagraj
You are eligible to claim deduction for house rent allowance with respect to payment of rent pertaining to residential accommo-dation occupied by you, subject to the maximum limits. However, no HRA benefit shall be available if the house, in respect of which the deduction is claimed, is owned by you or if the expenditure has not been incurred in respect of rent of the house property.

Is there any way to set off long-term capital gains (LTCG) in equity with short term capital loss?
—Dhiraj
Short-term capital loss, can be set off againstLTCG as well as short-term capital gains. Therefore, you may set off your short term capital loss against long term capital gain on sale of equity.

In 2013 I bought two Union Sud Life’s Bright Child policies for my minor children for Rs 3 lakh each for which I am paying Rs 38,000 & Rs 32,000 for 10 years. They will get Rs 1 lakh at 21 years and Rs 3 lakh at 24 years plus bonus. How much income tax rebate is allowed under Section 80C and on maturity?
—Rajesh Mittal
Union Sud Life Bright Child policy provides I-T benefit under Sections 80C & 10(10D). As per Section 80C, any premium paid for life insurance policy of self/ spouse/ children shall be allowed as deduction from the gross total income, subject to ceiling of Rs 1.5 lakh. Section 10(10D) exempts maturity proceeds from tax, if premium paid is less than 10% of the capital sum assured. Since premium paid in your case is more than 10% of capital sum assured, maturity proceeds shall be taxable and therefore, subject to deduction of tax at source.

The writer is director, Nangia Advisors (Andersen Global). Send your queries to fepersonalfinance@expressindia.com