You can claim exemption from payment of long term capital gains tax on jewellery if you invest the net sale proceeds for purchase of a residential house in India subject to fulfilment of certain conditions.

2) 

Section 54F allows income tax exemption on capital gains earned from selling capital assets such as shares, gold, or bonds, if the gains are re-invested in purchasing a house.

The proceeds earned from the sale of the gold asset will be exempt from tax if they are used to purchase a house within one year before the sale of gold or within two years of the sale of the gold.

The proceeds will also be exempt from tax if they are used to build a house within three years of the sale of the gold asset.

Section 54F of the Income Tax Act, 1961, is a section that allows tax exemption on the long-term capital gains earned from selling a capital asset other than a house property. So, if you sell a capital asset like shares, bonds, jewellery, gold, etc., and reinvest the sale proceeds towards the purchase or construction of a house property, the returns earned on the sale of the capital asset would be allowed as an exemption from tax under Section 54F.

To claim a valid exemption under Section 54F of the Income Tax Act, you have to fulfil some basic requirements. These requirements are as follows –

• The exemption is available to individuals and Hindu Undivided Families (HUFs)
• To claim the exemption, the sale proceeds should be used in the following manner –

  • To buy a new residential property one year before the date of sale of the asset
  • To buy a residential property within 2 years from the date of sale of the asset
  • To construct a residential property within 3 years from the date of sale of the asset

• If you invest a part of the sale proceeds in the property, the full exemption would not be allowed. In such cases, the exemption would be available on a proportionate basis. The amount of exemption would be calculated as follows –

  • Capital gains * amount invested / net consideration

Dear client,  

Yes, capital gains on the sale of ancestral gold jewelry or loose diamonds can be offset by the purchase of immovable property under certain conditions. The following are the conditions that need to be met:

The immovable property must be purchased either one year before the sale of the ancestral jewelry or loose diamonds or within two years from the date of sale. Alternatively, the property can also be constructed within three years from the date of sale.

The capital gains from the sale of the ancestral jewelry or loose diamonds must be invested in the purchase or construction of the immovable property. The entire amount of the capital gains must be invested, and no part of it can be utilized for any other purpose.

The immovable property must be located in India.

The property must be held for a minimum period of three years after the date of purchase or construction.

In case the property is sold before three years, the tax benefit availed earlier would be reversed, and the capital gains tax would be applicable.

It is important to note that these conditions must be met to avail the tax benefit under Section 54 of the Income Tax Act, 1961. It is advisable to consult a tax expert or a chartered accountant to ensure that all the

Gold inherited from relatives is exempt from tax.

Further if you sell a capital asset like jewellery, gold, etc. and reinvest the sale proceeds towards the purchase or construction of a house property, the returns earned on the sale of the capital asset would be allowed as an exemption 

Yes if you receive profit in it chargeable as capital gains