New Delhi, Oct. 27 -- Suppose you are rummaging through your old almirah and stumble upon a couple of pieces of jewellery your grandmother gifted you when you were a child. You need money for an important expense and decide to sell one of them. You know that gifts received from specified relatives, such as parents, grandparents or spouses, are tax-free at the time of receipt. But will the capital gains from selling the jewellery also be tax-free? Not really.

The tax liability will depend on the cost of acquisition, the holding period and the sale price. The date you inherited or received the jewellery as a gift will not determine the tax treatment on its own. The previous owner's cost of acquisition and holding period, along with the dat...