I have let out two properties which are owned in joint name with my wife. Should we divide the tax to be paid on the rental income?
—Ashok Sharma
Under Section 26 of the Income Tax Act, 1961, when a house property is owned jointly by more than one person and their shares are definite and ascertainable, the income from such property is to be assessed in the hands of each co-owner according to their share in the property. Each co-owner is entitled to compute their share of income independently, claim deductions (such as Section 24 standard deduction or interest on borrowed capital) individually, and disclose their respective incomes in their own returns.
How to pay tax on cash rewards
l My son, who is 15, got a cash award for outstanding results. Should I pay tax on the amount received as he does not have a PAN number? —Raminder Singh
When a minor child receives income due to their personal skill, talent, or knowledge (such as a government award for academic achievement), this income is taxable in the minor’s own hands and not clubbed with the parent’s income. You must file the minor’s return as a representative assessee; if the aggregate income exceeds the threshold, a PAN should be applied for the minor and taxes should be paid as per the applicable slab rates, if any.
Tax calculation process for selling ETFs
How do I calculate the tax on gains from selling units of gold exchange traded funds (ETFs)? —Brijesh Pant
Units of gold ETFs are treated as capital assets. Gains from their sale are categorised as either short-term capital gains or long-term capital gains, depending on the holding period. Units held for more than 24 months are treated as long-term capital assets, and the resultant gains are taxed at a flat rate of 12.5% without indexation
Units held for 24 months or less continue to be taxed as short-term capital gains at the investor’s applicable slab rate. You must compute the gain as the difference between sale proceeds and acquisition cost. If any STT or other expenses were incurred for the transaction, deduct those as permitted.
About the Author
Amit Maheshwari is tax partner, AKM Global. Send your queries
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