PRACTICAL CASE STUDIES ON TAXABILITY OF GIFTS
Specified gifts received in cash or kind exceeding Rs.50,000 in value during the year are treated as income liable to tax !
Section 56(2)(vi) had cast income-tax liability only in respect of a ‘gift of any sum of money exceeding Rs.50,000’. In view of this clear language, any gift received in kind (not being any sum of money) clearly fell outside the liability for income-tax, irrespective of the value of such gift.
However, as per the provisions of Section 56(2)(vii) introduced with effect from 1st October, 2009, in case of nine specified properties as mentioned hereunder, received by an individual or HUF, either by way of gift or for a purchase consideration that is treated by the Assessing Officer as inadequate, the market value of such gift or the differential value of such purchase, if exceeding Rs.50,000, will be taxed as income from other sources. (more…)
