By Neeraj Agarwala
My parents had a few acres of agricultural land which they sold. Do they have to pay any capital gains tax? As they want to give me some money from the proceeds, do I have to pay any tax on it?
—Rajkumar
Agricultural land located in a rural area is not classified as a capital asset under Indian tax law. Consequently, any gains from the sale of such land by your parents are not subject to capital gains tax. Gifts received from parents are not taxable in the hands of the recipient.
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This means that you will not be liable for any taxes on the money received from your parents as a gift. However, keep detailed records of the land sale and the subsequent gift. Proper documentation will be crucial in clarifying the source of funds in your account should any inquiries arise.
Apart from salary income, I also earn short and long-term capital gains from trading and investing in mutual funds. Will I be eligible to get the tax rebate of up to Rs 12 lakh announced in the 2025 Budget?
—Nilesh Gaur
The tax rebate is available against income tax payable on incomes up to Rs 12 lakh. It does not extend to incomes derived from Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG). Therefore, if your capital gain income is less than Rs 12 lakh, you will still be required to pay the applicable taxes on such income.
Under the new tax regime, will I get the 30% deduction and rebate on house tax for rent received?
—Arvind Kamath
Under the new tax regime, as per Section 115BAC, taxpayers are required to forego many of the deductions available under the old tax regime. However, if you receive rental income from letting out a property, you are still eligible to claim a 30% standard deduction as well as a deduction for municipal taxes paid on that property under the new tax regime. This can be deducted directly from your rental income.
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After two years, I will retire and get a gratuity of around Rs 25 lakh.
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