Inheritance of jewellery will not entail any taxes, moreover, your mother has no other source of income, thus, she shall not be required to file an Income Tax Return
My mother inherited gold jewellery from my grandmother which as per the valuation we have got done is more than Rs 5 lakh. My mother is a home maker and has no income of her own. She does not file tax returns. But now that she has this jewellery should she file tax returns?
– Shipra Ghosh
An Income Tax Return is required to be filed by an individual only if his/ her total income exceeds the maximum amount not chargeable to tax (that is, Rs 2.5 lakh in case of individuals, Rs 3 lakh in case of senior citizens and Rs 5 lakh in case of super senior citizens). Inheritance of jewellery will not entail any taxes, moreover, your mother has no other source of income, thus, she shall not be required to file an Income Tax Return. However, if the jewellery is sold at a future date then tax shall have to be paid on the difference between the sale consideration and the cost to the previous owner of the jewellery.
If I take a loan to buy a plot of land for constructing a home will I get tax benefit? Will it be considered as a home loan?
– Piyush Gupta
Unlike a housing loan, which is eligible for tax deduction for payment of both interest as well as the principal amount, the position on tax deduction in respect of land loans is not so clear.
There are two views possible, first being that since the deduction is in respect of loan obtained for the purpose of purchase or construction of a house property, loan for land acquisition should not be allowed a tax deduction. Another view is that since construction of a house in not possible without land, tax deduction should be allowed for loan taken to buy the land which shall be used for construction of a house property within the prescribed timeline.
Accordingly, a position can be taken that tax deductions can be availed if you are constructing a house on the plot of land for which the loan is obtained. However, the deduction in that case can be availed only after completion of the construction. Any interest paid on the loan during the period prior completion of its construction can be claimed as a deduction in five equal annual installments while computing the house property income starting the year in which the construction is completed.
Chirag Nangia, Director, Nangia Advisors LLP
Send your queries related to personal tax to personalfinance@dnaindia.net.
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