My grandmother had purchased some shares earlier than 1980. My mom, who inherited it in 2021, gifted these to me and I offered it in January 2022 to purchase a home. What will likely be the price of acquisition (COA) of those shares? Additionally, will the achieve be thought of as LTCG or STCG?
— Harshit Doshi
For the reason that shares had been bought by your grandmother (being the unique proprietor) which had been then handed on to your mom underneath a will after which subsequently to you as a present, the COA for such shares would be the price at which your grandmother bought such shares. Nonetheless, since your grandmother bought these shares earlier than 1 April 2001, the COA will likely be truthful market worth (FMV) as on 1 April 2001 or the acquisition worth of the shares, whichever is greater.
Additional, in case of fairness shares which are listed in India, COA for computing LTCG shall be greater of FMV of shares as on 1 April 2001 or COA of authentic proprietor or FMV of shares as on 31 January 2018 (topic to most of sale worth). Since your grandmother held the belongings since Seventies-80s, that are offered in January 2022, the identical shall qualify as long-term capital belongings and the beneficial properties/ loss shall be LTCG/L.
I’m a authorities worker and get a gross annual wage of ₹7,90,864. This contains an NPS (tier 1) contribution of ₹79,198, a premium of ₹7,800 in direction of medical insurance coverage, and ₹50,000 every in PPF and NSC, respectively. I wish to know whether or not I can declare ₹29,198 deduction underneath part 80CCD(1B) as a part of self NPS contribution and ₹1.5 lakh deduction underneath part 80C.
— Shivam
It’s assumed that ₹79,198 in direction of NPS deducted out of your wage, is your individual contribution in direction of NPS and it doesn’t signify employer contribution to NPS. As per the provisions of part 80CCD(1), a person employed by the Central authorities on or after 1 April 2014 shall be allowed a deduction for the quantity paid underneath the notified pension scheme (contains NPS) as much as 10% of the outlined wage (being fundamental and DA). Additional, part 80CCD(1B) permits a further deduction of ₹50,000 for worker contribution in direction of NPS, offered no deduction has already been thought of underneath part 80CCD(1) for a similar quantity paid.
Accordingly, your NPS contribution of ₹79,198 could also be bifurcated as ₹50,000 underneath part 80CCD(1) (assuming it’s inside 10% of the outlined wage) and the steadiness of ₹29,198 underneath part 80CCD(1B), for the aim of tax deduction. As your investments into funds eligible for deduction underneath part 80C is ₹150,000 ( ₹50,000 every in PPF, NSC, and NPS), you might be eligible to assert the surplus NPS contribution of ₹29,198 as a deduction underneath part 80CCD(1B). In case your employer is unable to contemplate the deduction in your payroll, you could contemplate the identical underneath part 80CCD(1B) whereas submitting your return of revenue.
Parizad Sirwalla is accomplice and head, world mobility providers, tax, KPMG in India.
Supply: Live Mint