Skip to content
All about finance. — All about personal finance.

Income from rentals to investments in gold ETFs: A financial advisor addresses your tax-related inquiries

Every co-proprietor has the right to calculate their own portion of earnings separately, Along with the option to claim personal deductions (for example, Section 24 standard deduction or interest on borrowed funds), and subsequently, declare their individual income in separate returns.

,   and  Administrator
2 min read
Personal Tax Conundrums Resolved: Specialist Provides Guidance on Rental Income and Gold ETF...
Personal Tax Conundrums Resolved: Specialist Provides Guidance on Rental Income and Gold ETF Investments

In the realm of personal finance, understanding the tax implications of jointly-owned properties and investments like Gold ETFs is crucial. Here's a breakdown of the key points regarding these matters, based on the Income Tax Act and the current financial landscape.

Jointly-Owned Property

  1. Apportionment of Rental Income: Rental income from a jointly-owned property is divided according to the ownership ratio of the co-owners. For example, if two owners hold 60% and 40%, rental income is split accordingly.
  2. Deductions Allowed:
  3. Municipal Taxes: Property taxes paid are deductible from the gross annual value (GAV).
  4. Standard Deduction: 30% of the net annual value (after municipal taxes deduction) is allowed as a standard deduction irrespective of actual expenses.
  5. Interest on Home Loan: Interest on a home loan taken for acquisition, construction, repair, or renovation is fully deductible against rental income without any monetary ceiling for let-out property.
  6. Tax Regimes Consideration: Under the old tax regime, set-off of losses from house property (up to ₹2 lakh) and Section 80C deduction for principal repayment apply. In contrast, under the new regime, these benefits are not allowed, though municipal taxes and the standard deduction are permitted.
  7. Separate Filing by Co-owners: Each co-owner claims deductions and computes taxable rental income separately based on their share and incurs tax liability independently.
  8. Minor Co-owners: When a minor child receives income due to their personal skill, talent, or knowledge, this income is taxable in the minor's own hands and not clubbed with the parent's income.

Gold ETFs

  1. Capital Gains: Gains from selling Gold ETF units can be classified as short-term or long-term capital gains.
  2. Short-term Capital Gains (STCG): STCG are taxed at the investor's applicable slab rate.
  3. Long-term Capital Gains (LTCG): LTCG (units held for more than 24 months) are taxed at a flat rate of 12.5% without indexation.
  4. Deductible Expenses: Any STT or other expenses incurred for the transaction can be deducted as permitted.
  5. Minor Investors: If a minor receives a cash award or sells Gold ETF units, a PAN should be applied for the minor, and taxes should be paid as per the applicable slab rates, if any.

For any queries related to personal finance, you can send your questions to [email protected]. This information has been provided by a tax partner at AKM Global.

[1]: Source 1 [2]: Source 2 [3]: Source 3

  1. Delving into the market of Decentralized Finance (DeFi), one can find various exchanges offering digital assets like Gold ETFs, serving as a viable alternative for traditional investment methods.
  2. In the sphere of personal finance, understanding the tax implications of investment in DeFi and its cryptocurrencyassets, such as Gold ETFs, becomes imperative, especially considering the volatile nature of this market.
  3. For those seeking financial advice on DeFi investments, it may be beneficial to consult trusted sources like tax professionals or financial advisors, as the tax treatment and regulatory landscape for such investments can be complex.

Read also:

    Related

    Latest