What is shopping for worth of inherited shares?

My grandmother had purchased some shares earlier than 1980. My mom, who inherited it in 2021, gifted these to me and  I offered it in January 2022 to purchase a home. What will probably be the price of acquisition (COA) of those shares? Also, will the acquire be thought-about as LTCG or STCG? 

         — Harshit Doshi

Since the shares have been bought by your grandmother (being the unique proprietor) which have been then handed on to your mom beneath a will after which subsequently to you as a present, the COA for such shares would be the price at which your grandmother bought such shares. However, since your grandmother bought these shares earlier than 1 April 2001, the COA will probably be honest market worth (FMV) as on 1 April 2001 or the acquisition worth of the shares, whichever is greater.

Further, in case of fairness shares which are listed in India, COA for computing LTCG shall be greater of FMV of shares as on 1 April 2001 or COA of unique proprietor or FMV of shares as on 31 January 2018 (topic to most of sale worth).  Since your grandmother held the property since Seventies-80s, that are offered in January 2022, the identical shall qualify as long-term capital property and the good points/ loss shall be LTCG/L.

I’m a authorities worker and get a gross annual wage of ₹7,90,864. This consists of an NPS (tier 1) contribution of ₹79,198, a premium of ₹7,800 in direction of medical insurance coverage, and ₹50,000 every in PPF and NSC, respectively.  I wish to know whether or not I can declare ₹29,198 deduction beneath part 80CCD(1B) as a part of self NPS contribution and ₹1.5 lakh deduction beneath part 80C.

                                                — Shivam

It is assumed that ₹79,198 in direction of NPS deducted out of your wage, is your individual contribution in direction of NPS and it doesn’t characterize employer contribution to NPS. As per the provisions of part 80CCD(1), a person employed by the Central authorities on or after 1 April 2014 shall be allowed a deduction for the quantity paid beneath the notified pension scheme (consists of NPS) as much as 10% of the outlined wage (being fundamental and DA). Further, part 80CCD(1B) permits an extra deduction of ₹50,000 for worker contribution in direction of NPS, offered no deduction has already been thought-about beneath part 80CCD(1) for a similar quantity paid.

Accordingly, your NPS contribution of ₹79,198 could also be bifurcated as ₹50,000 beneath part 80CCD(1) (assuming it’s inside 10% of the outlined wage) and the stability of ₹29,198 beneath part 80CCD(1B), for the aim of tax deduction. As your investments into funds eligible for deduction beneath part 80C is ₹150,000 ( ₹50,000 every in PPF, NSC, and NPS), you might be eligible to assert the surplus NPS contribution of ₹29,198 as a deduction beneath part 80CCD(1B). In case your employer is unable to contemplate the deduction in your payroll, you could think about the identical beneath part 80CCD(1B) whereas submitting your return of revenue.

Parizad Sirwalla is accomplice and head, international mobility providers, tax, KPMG in India.

(Send your queries at mintmoney@livemint.com to get them answered by consultants)

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