Of LTA, Gift And Crypto Tax

Do you have income tax-related queries?
Please ask your questions HERE and rediffGURU Mihir Tanna, associate director, S K Patodia and Associates, will answer them.

Anonymous: Can you please confirm if i gave some money as gift to my father or mother on their birthdays then:

1. can i claim tax exemption on that amount? if yes then is there any amount limit on which tax exemption can be claimed and under what section of IT?

2. can my father or mother claim that tax exemption on that amount? if yes then is there any amount limit on which tax exemption can be claimed and under what section of IT?

Thanks in advance.

Amount gifted to relative is not considered as income. Thus, question of exemption doesn't arise for payer as well as receiver.

Srujana: Hi, why should we not claim LTA for cruise tour on Cordelia?

The amount exempted in respect of the value of travel concession from employer for himself and his family, in connection with his proceeding on leave to any place in India.

Anonymous: I am planning to buy crypto tokens in FY 2023-24. As per the tax law, I have to pay 1% TDS which will be debited by the crypto exchange. When I sell my crypto tokens in any of the subsequent financial years, I will have to pay 30% tax on the profit (plus surcharge). I wanted to know how will this 1 % surcharge be adjusted when I sell my cryptos in coming years? Or will I have to pay 1% this financial year and additional 30% taxes (plus surcharge) when I sell my cryptos? Kindly clarify the matter.

1% TDS is on transfer of virtual digital asset and credit will be given to seller, not to buyer. Thus, question of adjustment doesn't arise. Tax of 30% is applicable on transfer of virtual digital asset.

TDS will be applicable on both buyer and seller at 1% in Crypto-to-Crypto transactions only.

Anonymous: Subject: Urgent Advice Needed Regarding Partial Cash Payment for Flat Purchase:

Dear Mr. Mihir Sir I am writing to seek your urgent advice regarding a potential flat purchase. I am interested in a particular flat, but the owner is requesting a partial payment in cash. Please note that all my funds are held legally in bank accounts, and I have no concerns about the source of my money. I have all white money. However, I am hesitant about making cash payment, even partially, due to possible legal and tax implications. Therefore, I kindly request your expert guidance on the following:

• Legality: Is it legal to make partial cash payment for a flat purchase in India? Are there any specific limits or regulations regarding cash transactions for property deals?

• Tax Implications: Could making cash payment, even partially, raise any red flags from the tax authorities? What are the potential tax repercussions I should be aware of?

• Risks and Alternatives: Are there any other risks associated with making cash payment, such as the possibility of fraud or disputes? Is it possible to negotiate with the owner for alternative payment methods that are more transparent and avoid cash entirely?

I would greatly appreciate it if you could provide your insights and recommendations on how to proceed with this situation in a safe and compliant manner. My primary concern is protecting my financial interests and ensuring a smooth and hassle-free flat purchase.

Please feel free to reach out if you require any further information or clarification. I look forward to your prompt and valuable advice. Thank you for your time and expertise.

No person shall receive an amount of two lakh rupees or more (a) in aggregate from a person in a day; or (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.

Further, cash payment, if any, should be part of sale consideration mentioned in the sale agreement.

Rohan: Hi My mom sold her shares recently for approx 10 lakhs. These shares were purchased around 2003. I need to know the taxation part as I have heard about the grandfathering rule under section 112A

Yes as per grandfathering provisions, cost for calculation of capital gain will be higher of the actual COA of such investments; and

The lower of:

• Fair Market Value (‘FMV’) of such investments; and

the Full Value of Consideration received or accruing as a result of the transfer of the capital asset i.e. the Sale Price

• You can ask rediffGURU Mihir Tanna your questions HERE.

Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this QnA or an attempt to influence the opinion or behaviour of the investors/recipients.

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.