Capital gain exemption u/s 54F

Mr. Bhahardwaj asked:
I am planning to purchase a new house for which I am going to sale gold which I have received as a gift from my grandmother which my grandmother purchased around 10 years back. What would be the legal consequences for the same.

Answer
For your easy understanding I have summarised the legal consequences in the following points.

1. The gift from your grandmother is exempt from tax.
2. When you sell the gold received from your grandmother, you will be chargeable to long term capital gains.
3. Thirdly if you invest whole of sale consideration in new house (which you need to do within 2 years) you will be eligible to exemption u/s 54F for whole of the capital gains.
4. Further there is a lock in period of three years which means you cannot sell that house within a period of three years.
   
5. If you do the exemption u/s 54F would be withdrawn and you will have to pay the capital gains tax on sale of gold.
6. Further its better that you show in your Income tax return the gift you have received and exemption u/s 54F to prevent further assessments.

In short you sell gold and purchase house and file the Income tax return as per point 6.
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Is filing of return compulsory for me?

Puneet asked:
I received a salary of Rs.2,00,000 in the year 2008-09. Further I had a PPF contribution and LIC of approx. Rs.65,000. Do I need to file incometax return. Also which incometax form will I have to use.

Answer
As per the law you DONOT need to file your IT return but I would advise you to file your return.
The law says that a person whose total income is less than Rs.150000 will not be required to file the return. And since your total income i.e. 1,35,000(200000-65000) is less than 150000, you need not file a return.

An extract from the bare act (Section 139(1) ) will clear the same
Every person

(b) being a person other than a company(or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

But I would advise you the same due to the benefits like return helps a lot in loans applications to bank.
You will have to use ITR1.
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