Tax quest

I had sold a house in July 2012 for Rs 15 lakh. My capital gains from the sale is Rs 10 lakh. Is the balance Rs 5 lakh accrued in my account in this financial year taxable?

Jayanta Sarkar, Calcutta

Long-term capital gains on the sale of property is the difference between the sale consideration and the indexed cost of acquisition. In your case, the sale consideration is Rs 15 lakh and your capital gains is Rs 10 lakh. So, the indexed cost of acquisition is Rs 5 lakh. Since you had acquired the property before financial year 2012-13, it is already an asset in your possession and as such is not part of the taxable capital receipts during the year. So, it is not liable to tax.

Is it essential for all citizens to have a PAN card even if they have a zero taxable income? Are there any exemptions?

R. Sen, Calcutta

No, it is not essential for citizens to have a PAN card even if they have a zero taxable income. If a person who is entitled to receive any sum or income or amount on which tax is deductible in any financial year, he/she shall apply for PAN card before the end of such financial year.

What is the threshold for premium that qualifies for deduction in the case of insurance premium?

K. K. Guha, Sodepur

Under Section 80C of the Income Tax Act, insurance premium for the taxpayer, spouse and any child is deductible within the overall limit of Rs 1,00,000. However, if the premium payable for any year is more than 20 per cent of the actual sum assured, the excess amount does not qualify for any deduction. The above provision has been amended with effect from the assessment year 2013-2014 to reduce the threshold of premium payable to 10 per cent of the actual capital sum assured . Further, the above provision will be applicable only for policies issued on or after April 1, 2012. For policies issued before April 2012, the old provision of 20 per cent of the actual sum assured will be applicable.

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.