Stridhan and its Taxation under Provisions of IT 1961

As you are aware that "Stridhan" is known as bride's Pin Money (in England) and peculium (under Roman Law). It is that part of property or wealth which exclusively belongs to women. Our ancestors have recognized the same well before it was recognized by the Romans.

All gifts of jewellery and appliances given to a woman by her parents or her in-laws at the time of her marriage or during her marriage ceremony, any property conferred on her by way of a will by her parents and any gift given to her by her parents and in-laws are all parts of the Women's Property and are commonly known as "Stridhan".

Stridhana, as defined by Yajnavalkya is: Wealth received by the woman from her father, mother, husband or brother out of love and affection. Wealth given to the bride by her maternal uncle and relative etc. at the time of marriage in presence of nuptial fire.

WIKIPEDIA: Stridhana is a term associated with property in Hindu Law. Whether property is stridhan, or a woman's estate, depends on the source from which it has been obtained. A woman has inalienable rights over stridhan, and she can claim the same even after separation from her husband.

UNDER HINDU LAW

PROPERTIES ACQUIRED FROM THE FOLLOWING SOURCES BY A HINDU FEMALE CONSTITUTE SRIDHAN

•  Gifts and bequests received from relations (The Dāyabhāga School however doesn't recognize gifts of immovable property by her husband as stridhan). 
• Gifts and bequests from non-relations/strangers.
• Property acquired by self-exertion, science and arts. (A woman may acquire property at any stage of her life by her own self exertion, such as by manual labor, employment, or by singing, dancing etc., or by any mechanical art. According to all schools of Hindu Law, the property thus acquired during widowhood or maidenhood is her stridhan. The property thus acquired during coverture also constitutes her stridhan according to all schools other than the Mithila and Bengal Schools. During her husband's lifetime, however, it is subject to his control.
• Property purchased with the income of stridhan.
• Property purchased under a compromise.
• Property obtained by adverse possession.
• Property obtained in lieu of maintenance.
• Property received in inheritance.
• Property obtained on partition.

UNDER VEDIC CULTURE

STRIDHANA, AS DEFINED BY YAJNAVALKYA IS

• Wealth received by the woman from her father, mother, husband or brother out of love and affection.
• Wealth given to the bride by her maternal uncle and relative etc. at the time of marriage in presence of nuptial fire.
• Wealth that is given by the husband at the time of second marriage to satisfy his previous wife.
• Wealth given to the bride by the cousins and relatives of her parents.
• Wealth given to the bride from the side of the bride-groom prior to marriage towards duty.
• Wealth given to the newly wedded bride at the time of her departure from her father's house.
• Wealth received by the bride in her matrimonial house after the marriage.
• Wealth given to the new daughter-in-law by the father-in law or mother-in-law out of love and affection.
• Wealth received by a married or unmarried daughter in her parental house from her brother or parent.

MANU HAS PRESCRIBED SIX KINDS OF STRIDHANA TO THE MINIMUM EXTENT

According to Manusmriti, after the death of an issueless woman, her relatives are entitled to get her stridhan. If the marriage has been performed in the form of Brahma, Daiva, Gandharba or Prajapatya, the husband of the deceased issueless woman is entitled to get the stridhan, however, in case of Asura, Rakhyasa and Paisacha form of marriage, the stridhan of an issueless, deceased woman is taken by her father or mother.

HINDU SUCCESSION ACT, 1956

The Hindu Succession Act (Act No. 30 of 1956) resulted in many changes being made to both the Mitākṣarā and the Dāyabhāga systems regarding succession and partition.

LET'S ANALYSE -The word ''Streedhan' has been derived from the Sanskrit words 'Stri' meaning a woman and the word 'dhan' means property. Therefore on combining these two words, we get 'property of woman' her 'Streedhan'. (Streedhan, sometimes also spelt as Stridhan in English.)

These two words imply that property over which a woman has an absolute ownership. The 'Streedhan' must be without any consideration in return thereof. Stridhan is a concept of Hinduism only.

RECENT AMENDMENTS IN HINDU SUCCESSION ACT, 1956

According to the age-old Smritis, all old schools of Hindu law such as Dayabhaga, Mitakshara etc. and recent Amendments to the law, the following is Streedhan in the hands of a woman whether she is a maiden, married woman or widow;

ACCORDING TO SECTION 14 OF THE HINDU SUCCESSION ACT, 1956 property obtained by a woman from the following sources is her absolute property (unless contrary is mentioned in the terms of device, gift, decree, order or award). Property acquired-

• by inheritance
• By device - through will or a settlement
• At a partition
• In lieu of maintenance
• By gift
• By personal Skill or exertion
• Purchase and prescription - with the help of her own funds
• Acquired in any other manner- property received under a decree or award, or through adverse possession.

Gifts that are -

• Made to a woman before the nuptial fire (Adhayagni).
• Gifts made to a woman at the bridal procession (Adhyavaharika).
• Gifts made after marriage by a woman's husband (Patidatta) husband's relations or parent's relations and gifts from sons and relations .
• Made in token of love by father-in-law, mother-in-law.
• Gifts made by father, mother and brother.
• Gifts given by her friends etc.,

The wealth includes both movable and immovable assets. There is no upper cap to stridhan. It can be whatever amount.

If a woman gifts a property to her husband during and after marriage, those are not part of Streedhan.

SMT. PRABHA RANI Vs. SURAJ KUMAR [1985]155 ITR 190(SC)- it was held that under Hindu Law, Stridhan is the absolute property of a lady. In this case the ornament of wife was seized by husband and she was turned out of house. Her stridhan consisted of nine gold sets , one complete diamond set, shingar patti with golden tikka , two baju bands, three gold rings, one golden nath, a dozen gold bangles, one gold chain and two pajebs. The court held that stridhan does not become joint property , the amount a wife enters matrimonial home. If stridhan is entrusted to the husband or in-laws , it does not stand transferred to them as co-owners or partners. As trustees they are bound to return to return the same if and when demanded by the lady. A woman can file a suit against the husband and the in-laws against misappropriation of her assets so left under their custody. A woman can file a suit whether civil or criminal for recovery of her property against her husband and her in-laws.

SECTION 64(1)(vi) of Income Tax Act, 1961 provides that- In computing the total income of any individual, there shall be included all such income as arises directly or indirectly—(vi) to the son's wife, of such individual, from assets transferred directly or indirectly on or after the 1st day of June, 1973, to the son's wife by such individual otherwise than for adequate consideration;

IT MEANS THAT- if husband or in-laws of a woman has paid her "Stridhan" out of their property or any amount paid for satisfaction of her Stridhan claim is not considered as transfer by in-laws to daughter -in-laws or by husband to his wife without proper consideration and hence clubbing provisions of Section 64 is not applicable.

B.I. GOVINDAPPA Vs. B. NARSIMHAIAH [AIR 1991 SC 1969]- the Apex Court held that there can be no manner of doubt that a Hindu Woman is the full owner is entitled to deal wit her Stridhan property as she likes. The mother who held property as Stridhan won the case , because it pronounced that she had not transferred the property to Givindappa by sale deed, ignoring adopted son Narshimhaiah.

The Apex Court further held that a woman can also put any restriction or curtailment of her rights by her own consent and free will over her Stridhan Property.

HOW DOES INCOME TAX TREAT STRIDHAN?

Suneela Soni Vs DCIT (ITAT Delhi)[ ITA No. 5259/DEL/2017]

AO has made the addition of Rs. 10,65,312.00 on account of purported unexplained jewelery claimed by the assessee without appreciating the fact that the jewelery found during the course of search and seizure operations was from the locker held by the father-in-law and husband of the assessee and hence the addition in the hands of the assessee is uncalled for.

It was noted that jewellery found from the joint lockers was explained to be belonging to Late mother-in-law of the assessee Smt. Sarita Soni, however, the AO has rejected this contention.

It is further noted that assessee's belongs to joint family and it is undisputed position that marriages of mother in law had taken place 53 years prior to the search and marriage of the assessee had taken place 20 years.

ITAT further note that the Hon'ble High Court of Delhi in the case of Ashok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi.)/202 Taxmann 395 has accepted the jewellery of 906.60 grams in the case of married lady even without documentary evidence as the denying the explanation would tantamount to overlooking the realities of life. Keeping in view of the aforesaid facts and circumstances of the case as well as the status of the family and on the anvil of the judgement of the High Court of Delhi in the case of Ashok Chadha vs. ITO reported in 14 taxmann.com 57 (Delhi.)/202 Taxmann 395, the explanation given by the assessee's counsel is accepted.

Accordingly, the orders of the authorities below are cancelled and addition made by the AO and confirmed by the Ld. CIT(A) amounting to Rs. 10,65,312/- on account of purported unexplained jewellery claimed by the assessee is deleted.

PLEASE NOTE THAT- it is important to have records or evidences and it will be satisfactorily explained the source of income from where Stridhan have been purchased.

Archana Agrawal Vs. DCIT[IT SS 189, 190(Indore/2017 & ITA 503) amount of 2027 Gms gold jewellary was found at assessee's house, out of which 1127 Gms was held to be unexplained.

The ITAT Indore Bench held tat assessee belonged to a rich family and acquisition of gold jewellary is quite reasonable in such families. Looking into Indian customs and accumulation of Stridhan of the assessee from past many years , which is normally saved by Indian ladies as well as smallness of the amount and the fact that she was regularly filing income tax returns, the Tribunal Found no justification for addition of Rs. 64,815 /- to the income of assessee as undisclosed income.

PLEASE NOTE THAT:- the gold, which was accepted by the tax authorities had been rightly said to given to Ms. Archana (500gms) , husband (100gms) and two sons (100gms each), which was as per CBDT Circular dated 11-05-1994.

The ITAT further held that disallowance of 1127 gms., gold as it was not supported by facts, evidences or their details , which could have proven source of unexplained jewellary.

CBDT INSTRUCTION NO. 1916(F.No.: 286/63/93-IT(INV.II) ,DATED 11/05/1994

GUIDELINES FOR SEIZURE OF JEWELLARY AND ORNAMENTS IN THE COURSE OF SEARCH

In many cases of search and seizure small quantities of jewellary /ornaments had been seized by the Income Tax Officers, which creates undue stress and operational problems for department and the assessees. Since every Indian Household generally keep small quantity of jewellary/ ornaments.

The Board had examined the case and following guidelines are issued for strict compliance ;

1. In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need to be seized.
2. In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of

• 500 gms. per married lady
• 250 gms per unmarried lady and
• 100 gms. per male member of the family, need not be seized.

1. The authorized officer may having regard to the status of the family and the customs and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income-tax/Commissioner authorizing the search all the time of furnishing the search report.
2. In all cases, a detailed inventory of the jewellery and ornaments found must be prepared to be used for assessment purposes.

PLEASE NOTE THAT: 

1. According to the CBDT's most recent circular, men, regardless of marital status, are only allowed to possess 100 g of real gold in the form of jewelry and ornaments. Married women are allowed to possess 500 g, unmarried women 250 g.
2. This gold should be in the form of jewellary/ornaments and not in any other form.

PLEASE NOTE THAT: it was held that CBDT cannot restricts any person to hold gold in form of jewellary more than as may be specified in CBDT INSTRUCTION NO. 1916(F.No.: 286/63/93-IT(INV.II) ,DATED 11/05/1994 , of person holding such gold in excess have evidences to show the source of purchase and facts to explain so that gold not considered as unexplained investment.

PIN MONEY: Pin Money means "A reasonable allowance given to the wife by her husband for her dress and usual household expenses".

Pin Money is not Taxable ; neither in the hands of the transferor nor in the hands of the transferee.

U/S 64(1) (iv) of the Income Tax Act-1961, any income arising from assets transferred to spouse without adequate consideration is taxable in the hands of the transferor and not in the hands of transferee.

However, if asset is acquired by the spouse out of pin money (i.e., a reasonable allowance given to the wife by her husband for her dress and usual household expenses) then the income from such assets cannot be clubbed with the income of her husband. [R.B.N.J Naidu Vs CIT (1956) 29 ITR 194 (Nag) and R. Dalmia Vs. CIT (1982) 133 ITR 169 (Delhi).]

PLEASE NOTE THAT:- the income generated by investment of Pin-Money is taxable in hand of wife.

FAQS ON STRIDHAN

CONCLUSION 

From above discussion we conclude that "Stridhan" is absolute and exclusive property of every woman. It not property of her husband and in-laws. A woman can file suit to recover its "Stridhan" and deal with property according to her will. Stridhan may be in form of movable as well as immovable properties. The CBDT Circular CBDT INSTRUCTION NO. 1916(F.No.: 286/63/93-IT(INV.II) ,DATED 11/05/1994 even does not has any impact on Stridhan. Please note that above circular prescribed a limit up to which a person holds jewellary made of gold. But that circular does not restrict to hold more gold ,if you have facts to explain the source of purchase or evidences to substantiate the same.