Taxability on Gift of Capital asset by a Company



Quick Summary
Gifting a capital asset from a company is generally considered a taxable transfer, unlike gifts made by individuals or Hindu Undivided Families (HUFs). While Section 47(iii) of the Income Tax Act previously exempted gifts from individuals and HUFs, recent amendments effective from AY 2025-26 clarify that this exemption does not extend to companies. This distinction is crucial for understanding capital gains tax liabilities on corporate gifts.

1. Sec.47 on transfers not regarded as transfers states as follows: (iii) any transfer of a capital asset by an individual or a Hindu undivided family, under a gift or will or an irrevocable trust; 2. The aforesaid clause (iii) of Section 47 of the Income Tax Act specifically states that any gift
Daily Limit Reached

You have reached your daily limit of 2 Free Articles

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?
  • No Ads
  • WhatsApp Community
  • Daily E-Newsletter
  • Unlimited Articles Access
  • Profile Visitors
  • Link Social Profiles
  • Featured Job Posts
  • Pro Badge
  • Expert GST Guidance
  • Unlimited Forum Replies
  • Download Content in PDF
BEST VALUE
2 YEAR PLAN
3,499
(Excl. of GST ₹629)
1 YEAR PLAN
1,999
(Excl. of GST ₹359)

3 MONTHS PLAN
999
(Excl of GST ₹179)
View all CCI PRO benfits

Already a PRO member? Login here for an ad-free experience.


432 Views 1 Likes Comment   Share Income Tax   Report


About the Author

Partner

I am a practising Chartered Account with 19+ years of experience in Direct Tax and Accounts.

Comments :

Related Articles


Loading


Popular Articles





CCI Pro

CCI Articles

submit article