1 lakh gift exemt

Dear Abhishek,

First I would like to appreciate Singhania Sir because he is too good in picking up cases like this...

Actually if u carefully notice the WAY in which AMENDMENT is made by Finance Act(No.2) 2009 u will find that instead of amending clause(vi) , a new clause (vii) has been introduced.

Now clause (vi) was operativee till 30.09.2009 & after that clause (vii) becomes operative..

Now both these clause themselves provide exemption upto Rs. 50,000 separately.

So in FY 2009-2010 both can be claimed & if gifts received before and after 30.09.2009 does not exceed Rs. 50,000 each (though in aggregate they may exceed) Nothing shall be taxable.........:)

Dear Abhishek,

Changes Proposed In new Budget 2009 from 01.10.2009
Individuals receiving shares, jewellery, valuable artefacts or even property valued at over Rs 50,000 as gifts from non-relatives, will have to start paying tax from October 1,2009 The budget has extended the provision to tax cash gifts in the hands of the recipient to all non-cash gifts as well. These will include shares, jewellery, archaeological collections, valuable drawings, paintings or sculptures. If the value of these assets exceeds Rs 50,000, it will be treated as income for the recipient and taxed according to his or her taxslab.

regards,

ratan

Dear Amir,

In my opinion only 50000 will be allowed.

The intention of the legislature also has to be seen.

Actually in practice we had tried to do the same but the AO has refused to accept the contention.

Also such addition is  direct and hence risk to the assessee.

If we litigate it is possible that we may win after 15-20 years.(Insensible option)

Your opinion

Regards

Dear Amit Sir,

I understand that it could never be the intention but Law doesn't sop u in doing it..(So unethical or u can say a loophole or Tax avoidance or whatever u may like)

As far as giving effect to the Intention is concerned it is a settled principle, (which I also came to know during discussion in this forum only) that it has no place unless on literal reading two or opinions are possible.

So as far as literal meaning is concernred, which is the first rule of interpretation the above anomoly noticed by Shinghania Sir is very much possible (though I agree that not an ethical one)......:) 

But AO said no to CA. Amit

amir bhai,i have interpreted the intentions of ca. singhania ,but its purely unethical

the intention is not to provide 1 lakh exemption

so,what should we do?

should we follow the singhania sir's interpretation?

and amir bhai please explain

"As far as giving effect to the Intention is concerned it is a settled principle"

that means intention has no role to play?

I agree with Amir.

hi,

as per income tax act, the section 56(vi) is applicable till 30.09.2009, thus exemption of 50,000 will be taken till 30.09.09 . also the new section 56(vii) which is introduced w.e.f from 01.10.2009 the exemption of Rs. 50,000 will be given from 01.10.2009 till 31.03.2010 as this provision did not exist before that date.

thus for p.y. 2009-10 the assessee can take exemption of Rs. 100000.

100000 will be allowed as both the clauses are applicable for assement year 2010-2011...but from the next year limit will be only 50000.