'Will My Mother's Gold Sale Attract IT?'

Do you have income tax-related queries?
Please ask your questions HERE and rediffGURU T S Khurana, a fellow member of The Institute of Cost Accountants of India, will answer them.

Kindly note the image has been published only for representational purposes. Photograph: Kind courtesy Nawalescape/Pixabay

M G SivaSubraManian: I want to start a HUF entity with me as Karta and wife and son as members. I want to contribute 5 lakhs every year to HUF from my salary acct and then invest in the name of HUF in mutual funds and shares. Please advise me how to open a recognisable HUF entity, open a bank acct and how to deal this funding in tax efficent manner? Can I open a bank account in Tamilnadu though I reside and have Aadhaar card address in another State?

You may start a HUF by getting its separate PAN number. You are also supposed to open a bank account in the name of HUF. These are the basic formalities to start an HUF.

You can, as a Karta, form HUF with your Spouse & Children as members.

You can contribute any amount to HUF, annually or monthly.

The funds of HUF can be invested anywhere like mutual funds, share market or real estate, etc.

You can open a bank account in Tamil Nadu, while having aadhaar card in any other state of India

Anonymous: Hi I had taken a HDFC Life Pension Guaranteed Policy in 2020 when I was on NRI status with immediate annuity pay out ROPP (Return of Purchase Price) Option. I had relocated in in 2021 and I have received the annuity pay out every year till date. Now due to some urgent requirement of funds I am thinking of surrendering the policy. Please note there is no sum assured for life in this policy and there is no Maturity Benefit. Could you please advise whether the surrender value will attract Income Tax for the Assessment Year 2025-26? If so please advise the current IT regulations and the tax rate applicable?

This is an investment plan and not a life insurance policy. Any income generated from this investment would be taxable under Income Tax Act. Any Long Term Capital Gain (LTCG) generated at the time of surrender of policy, would be subject to income tax. Even the company may deduct TDS, while making payment of surrendered policy.

Anonymous: Hello Sir My wife age 48 owns a shop in Pune worth 80 lakhs bought in August 2024. She wants to sell it this year. What would be the tax applicable? And can we reinvest the amount in order to save tax? Thanks

Your question lacks some basic information, like Cost of Shop in 2024 etc. Besides, if she has other income then it would affect net tax payments.

You can definitely invest this amount (LTCG amount) in some residential house or in tax saver capital bonds, issued by NHAI etc. This investment would help you reduce your tax liability.

Anonymous: My Mother wants to sell some of her gold jewelry to cash. She is 77 and her only source of income is family pension of 40 k/month. Is there any tax implication?

She already has a pension income of Rs.4.80 (L), plus there could be some interest income also. Any jewellery sold shall be subject to capital gains (may be Short/Long Term).

You can ask rediffGURU T S Khurana your questions HERE.

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Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.