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capital gain

(Querist) 12 December 2009 This query is : Resolved 
Dear sir,
i have constantly purchased jewllery from 1979 till 2008. I had recently sold my residential flat to buy a new bigger flat and used the proceeds of my flat along with my long term investment in jewellery to pay the total amount. the proceeds of the sale of jewellery were used in paying the amount to the builder in the same year i.e may2009 (sold and purchased) for the purchase of flat only. will i be taxed for capital gain or get exemption under long term capital gain investments in property for self use of higher consideration.

kindly advice

Raj Kumar Makkad (Expert) 12 December 2009
repeated quarry
Vineet (Expert) 13 December 2009
You can claim exemption of long term capital gain arising out of sale of existing residential house and jewellery.

The long term capital gain shall arise on sale of assets held for 36 months or more in your case. that means any sale proceeds of jewellery purchased post May, 2006 in your case shall not result in long term capital gains and therefore will not be eligible for any exemption.

The LTCG on sale of existing flat shall be exempted u/s 54 to the extent of amount of LTCG being invested in new residential house.

The LTCG on sale of jewellery shall be exempt in same proportion of the investment in new house to the total sale proceeds of jewellery.

The investment claimed out of sale proceeds of flat and sale proceeds of jewellery cannot be more than total investment in new flat.

This is a broad reply to your query. with exact details a more specific reply can be given.
aryan malhotra (Querist) 15 December 2009
Dear sir,
the exact details are as under:-
new property purchased for 60 + 5 lacs registration = 65 lacs.
old house sold for 30 lacs
old jewellery for 17 lacs
capital gain on sale of jewellery is around 2 lacs.
since most of the purchases were thru credit card can the interest charged be added to the cost of acquitiuon of jewellery.
short term profit on jewellery sale is 30000. can that be set off against short term loss in shares.
the complete capital on sale proceeds of jewellery invested in buying the new flat for personal use.

kindly advice

Vineet (Expert) 17 December 2009
The Short term capital gain of sale of jewellery is entitled for any exemption but the same can be set off against short term capital loss on sale of shares or any other capital asset.

Entire capital gain on sale of old house and jewellery is exempt for LTCG u/s 54 and 54F respectively.

In your case, as the sale consideration of old jewellery is quite less (17 Lakhs) vis a vis investment in new house, the cost of acquisition is immaterial. Hence, the interest paid on purchase of jewelley is not material in this case though it should be added to the cost of acquisition in view of Decisions in K Raja Gopala Rao Case (252 ITR 459 Madras) and ITAT Chennai Bench decision in the case of Chemanchery States Co 118 TTJ 691.

Hope this resolves your query.
Sachin Bhatia (Expert) 19 December 2009
repeated query
aryan malhotra (Querist) 06 March 2010
Thanks for ur information.
i have to file the itr for the last year 2008-09 AY 2009-10. for the last 3-4 years i am filing returns myself online. In the form i could not find any column to declare my personal assets and liabilities. should i file these informations ( which colums in the form to declare these, as they do not accept the personal computation sheet). also i have sold the jewellery & house in this financial year 2009-10 AY 2010-11.
kindly advice to avoid any problems
Vineet (Expert) 06 March 2010
There is no provision to file statement of personal assets and liabilities under current IT Return forms. You file the details as required in return form and keep the bills etc with you for future reference.

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