Doubt on gifts taxable under income from other sources

Tax queries 1720 views 4 replies

Vikram Simha

Student

75 Points Posted on 04 March 2012

Dear Sir/Madam,

QUESTION: Mr. XYZ(aged 40) recives following gifts in current privious year:-

1)Cash gift from friend A rs.32000, friend B rs.16000.

2)500 Shares of PQR ltd from a nonrelative market value of these shares (fair value of 500 shares is rs.58900)

Find taxable value of giifts recieved taxable under the head income from other sources.

My doubt is,

(i) should we take value of gifts in agreegate (ie. 32000+16000+58900) and compare non taxable limit of morethan 50000 and tax 108900.

(ii) should we take the bifurcation of cash gift and moveable gift, then compare cash gift to 50000 limit and for moveable gift compare fair value u to 50000 limit again?

Hope, you have undersatnd what im asking.

Replies (4)

CA PARAS BAFNA

Practising CA

33428 Points Posted on 04 March 2012

This way goes in right direction

(ii) should we take the bifurcation of cash gift and moveable gift, then compare cash gift to 50000 limit and for moveable gift compare fair value u to 50000 limit again?

CA Rohit

In Practice

71 Points Posted on 06 March 2012

Hi...

I think the taxable income u/s 56 (vii) is Rs.58900 i.e. the FMV of movable property received by the assessee. When i go through the section i did not find any thing which says the total gift falling under 4 catergories is to be consolidated for getting exemption of limit of Rs.50000.This mean the limit of Rs.50000 is individual to all 4 catergories.

Vikram Simha

Student

75 Points Posted on 07 March 2012

Dear sir/madam,

As i came through the act it has metioned that " in agreegate of taxable value of gift should not exceed Rs.50,000" , in ipcc tax study material. Then wouldn't be taken also as gifts should be consolidated and then compared.