Tax free gifts

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2011 Can a person who is not a relation to you (say a friend)can gift a car to you without having any implication of tax to either one. This information has appeared in the Marathi newspaper "Daily Sakal" of 23/01/2011. The article is written by Mr. Milind Sangoram (CA).
Please throw light on this aspect.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

20 February 2011 Where an Individual or HUF receives any property other than immovable property from a non-relative and its value exceeds Rs 50000/- it is taxable in the hands of receiver.

However, Motor Cars have not been included in the definition of property in the explanation to clause (c) of Section 56(2)(vii). Hence if you gift a car to your friend it is tax free.

Guest

Guest (Expert)

20 February 2011 Agree with Mr. Bafna but definition of property has been given in the explanation to clause (d) of Section 56(2)(vii).

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

20 February 2011 1. Please note that Section 56(2)(vii) does not have clause(d).

2. "Property has been defined under Explanation to clause (c) of Section 56(2)(vii).
3. Explanation has been numbered as (a)
(b) (c),(d) and (e).
4. You can say property has been defined under Explanation(d)to clause (c) of Section 56(2)(vii)

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