| I am 80 years old and my wife is quite old, too. We have a full-time domestic help who we intend to gift from time to time some money in cheque drawn in favour of UTI with which she could buy units in some schemes of the fund house. She doesn’t have any one to fall back on in our absence and the mutual fund units will provide financial security for her in future. What will be the tax implication on her considering that she is not my relative? |
K.K. Dutta, Calcutta |
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| Gift tax has been abolished. But if a gift of more than Rs 50,000 is made in cash to a non-relative during a financial year, the entire amount will be considered as ‘income from other sources’ in the hands of the recipient and she will be taxed accordingly. Since you are buying mutual fund units for her, there will be no capital gains tax if she sells the units after 12 months of its purchase in her name. |
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| Share transfer |
| I purchased 50 shares of the SBI in 1993. The shares were bought jointly in my name and my nephew’s name. I transferred these shares to my nephew on May 4, 2007 and the date of transfer is noted in the original share certificates. If my nephew sells those shares after one year from May 4, 2007, what will be his tax liability? |
Arobinda Basu, Salt Lake |
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| There will be no capital gains tax if your nephew sells those shares after May 4 this year since his holding period of those shares in his own name will be 12 months. |
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| Electronic clearance |
| I had invested Rs 75,000 in the 10-year Unit Linked Insurance Plan of UTI. The annual income under the option is reinvested in units every year. The plan will mature in August this year. How can I get the maturity amount directly credited to my bank account instead of receiving a cheque from UTI by post? Is any TDS or capital gains tax applicable to the maturity amount? |
Somnath Bhattacharjee |
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| The ULIP of UTI enjoys similar income tax benefits as other unit-linked plans of life insurance companies. So, there will be no tax implication on your maturity amount. For direct credit of the amount to your bank account, you should give UTI and your bank an instruction in the prescribed form (available with the UTI or the bank) for electronic clearing system. |
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| 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. |
