Taxability u/s 56 (1) (vii)
This query is : Resolved
04 October 2010
Hi Everyone,
Just a small doubt, we all know any sum over 50,000 received from non relative is taxable u/s 56 (1) (vii).
The wording of section refers it as 'any sum of money, without consideration' thus it does not use the word gift, however intention here is tax gifts received without consideration.
My question is what if i am
a) Extending a loan to a friend, which he will repay back after some time?
b)Transferring for a very short time in friends Bank account (As his bank was having special arrangements with website where i wanted to pay the money).
Will My friend be taxed for that amount u/s u/s 56 (1) (vii) whereas he never kept that money?
Just a small doubt, we all know any sum over 50,000 received from non relative is taxable u/s 56 (1) (vii).
The wording of section refers it as 'any sum of money, without consideration' thus it does not use the word gift, however intention here is tax gifts received without consideration.
My question is what if i am
a) Extending a loan to a friend, which he will repay back after some time?
b)Transferring for a very short time in friends Bank account (As his bank was having special arrangements with website where i wanted to pay the money).
Will My friend be taxed for that amount u/s u/s 56 (1) (vii) whereas he never kept that money?
06 October 2010
Generally gift is understood to mean transfer of asset without consideration. The section covers the situation of transfer with inadequate consideration.
Transfer means transfer of ownership. Extending loan or giving returnable money is not transfer.
Hence no tax under section 56 (1)(vii).
Transfer means transfer of ownership. Extending loan or giving returnable money is not transfer.
Hence no tax under section 56 (1)(vii).
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