l I sold some family jewellery in December last year. Do I have to pay any capital gains tax on the money received and how do I compute the tax?—Akhil Bansal
Jewellery is explicitly defined as a capital asset under Indian tax laws, making any profit derived from its sale fully subject to capital gains tax. Following recent tax rationalisation frameworks, if the jewellery was held for more than 24 months, it qualifies as a long-term capital asset, and the resulting gains are taxed at a flat rate of 12.5% without the benefit of indexation. Otherwise, this shall be short term gains and shall be taxed as per the applicable slab rate.
To compute the taxable gain, the original cost of acquisition must be deducted from the final sale consideration; if the asset was inherited, the purchase cost paid by the original owner is utilised, and if it was acquired before April 1, 2001, taxpayers have the beneficial option to obtain a registered valuer’s report to use the Fair Market Value as of that date as the baseline cost. Conversely, should the holding period be 24 months or less, the profit is treated as a short-term capital gain and taxed according to the taxpayer’s standard income tax slab rates.
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l I am planning to give some money to a charitable institute that looks after senior citizens. Will I get any tax benefit and what is the maximum limit and the tax regime that I have to opt for?—Animay Sharma
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Yes, a donation to a charitable institution that takes care of senior citizens can qualify for a tax deduction, provided the institution is a registered non-profit organisation and has the requisite approval under Section 354 of the Income-tax Act, 2025 (Section 80G of old Income-tax Act). The fact that the institution works for senior citizens, by itself, does not make the donation eligible.
Under Section 133 (Section 80G of Old Income-tax Act), an eligible donation qualifies for a deduction of 50% of the amount donated, subject to an overall ceiling of 10% of the taxpayer’s Adjusted Gross Total Income (AGTI). For example, if the AGTI is Rs 20 lakh, donations up to Rs 2 lakh would qualify, resulting in a maximum deduction of Rs 1 lakh. The deduction is available only under the old tax regime. Further, cash donations exceeding Rs 2,000 do not qualify for deduction and, therefore, the donation should be made through banking or other permitted non-cash modes.
Accordingly, if the institution satisfies the prescribed eligibility and approval requirements, the taxpayer can claim a 50% deduction, subject to the 10% of AGTI ceiling, under the old tax regime.
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The writer is managing partner, AKM Global, a tax and consulting firm. Send your queries to fepersonalfinance@expressindia.com
Disclaimer: This article is for informational purposes only and should not be construed as investment, financial, tax, or legal advice. Any illustrations, examples, or return projections used in this article are for explanatory purposes only and do not guarantee actual investment outcomes. The views and opinions expressed by experts quoted in this article are their own and should not be considered investment recommendations. Readers should consult a qualified professional before making any financial decisions.
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