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Taxability of gifts

prachi (student) (39 Points)

22 December 2009

What is the treatment for gifts given by companies to other companies?

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13 Replies

Aashish Dinanath Tripathi (Articled Assistant and NCFM(CMDM)) (233 Points)
Replied 22 December 2009

It will be taxable, wheter in cash/kind (In Kind is taxable as per latest amendment)

with a threshold limit of rs. 50,000

any amount exceeding the same will be taxable in whole.

also the gift in kind will be chargeable to capital gains tax.

CA. Gurdeep Singh Chawla (C A) (7080 Points)
Replied 22 December 2009

TAXABLE

prachi (student) (39 Points)
Replied 22 December 2009

Ya taxable.. but will it be a deductible expense for company?? No limits?

RD Verma (CA. Student) (314 Points)
Replied 22 December 2009

DEDUCTION AVAILABLE FOR COMPANY and ALSO THERE IS NO LIMIT IF ALLOWED AS PER COMPANY ACT....

All the best

CA. D.DHANANJAYA (CHARTERED ACCOUNTANT) (90 Points)
Replied 22 December 2009

Originally posted by : Aashish Dinanath Tripathi
	It will be taxable, wheter in cash/kind (In Kind is taxable as per latest amendment) with a threshold limit of rs. 50,000 any amount exceeding the same will be taxable in whole. also the gift in kind will be chargeable to capital gains tax.

Gift received in cash or in kind is not taxable for companies, it is applicable only for individual and HUF

Chintan Vasa (CA Final Student M.Com) (1241 Points)
Replied 22 December 2009

Deduction would be allowed to the company only if such gift is in relation to the business of the company.

CA AVIK RAHA (SENIOR AUDIT ASSISTANT) (32 Points)
Replied 22 December 2009

I support Mr.D.Dhananjaya,

In accordance with the newly amended Sec.56(2)(VII) in the Finn.Act 2009 it has been clearly notified that a Gift in Cash or Kind will be taxable received in excess of Rs.50000.00.

As per clause (a) : Cash received as Gift by an Individual/HUF in excess of Rs.50000 will be taxable in hands of Gift receiver.

Clause (b) : Gift of Immovable property : If received without consideration & if SVA value exceeds Rs.50000 then such amt of SVA will be taxable in the hands of gift receiver.

If received against consideration & SVA exceeds the consideration by Rs.50000 or more, then such (SVA - Consideration) will be taxable.

Aggegation not be done, specific assets to be considered

Clause (c) : Movable property -- Shares,Securities,Jewellery

If received without consideration & if FMV value exceeds Rs.50000 then such amt of FMV will be taxable in the hands of gift receiver.

If received against consideration & FMV exceeds the consideration by Rs.50000 or more, then such (FMV - Consideration) will be taxable.

Aggergated value to be considered.

If Sec.56(2)(VII) gets applicable then Sec.49(4) shall be applicable for CG charged for transfer bt Gift receiver consequesntly.

Not applicable for Gifts from reletive..

CA Manasa (CA) (1479 Points)
Replied 22 December 2009

Originally posted by : AVIK RAHA
	I support Mr.D.Dhananjaya, In accordance with the newly amended Sec.56(2)(VII) in the Finn.Act 2009 it has been clearly notified that a Gift in Cash or Kind will be taxable received in excess of Rs.50000.00. As per clause (a) : Cash received as Gift by an Individual/HUF in excess of Rs.50000 will be taxable in hands of Gift receiver. Clause (b) : Gift of Immovable property : If received without consideration & if SVA value exceeds Rs.50000 then such amt of SVA will be taxable in the hands of gift receiver. If received against consideration & SVA exceeds the consideration by Rs.50000 or more, then such (SVA - Consideration) will be taxable. Aggegation not be done, specific assets to be considered Clause (c) : Movable property -- Shares,Securities,Jewellery If received without consideration & if FMV value exceeds Rs.50000 then such amt of FMV will be taxable in the hands of gift receiver. If received against consideration & FMV exceeds the consideration by Rs.50000 or more, then such (FMV - Consideration) will be taxable. Aggergated value to be considered. If Sec.56(2)(VII) gets applicable then Sec.49(4) shall be applicable for CG charged for transfer bt Gift receiver consequesntly. Not applicable for Gifts from reletive..

Completely Agree with u

rahul agarwal (CA FINAL STUDENT) (134 Points)
Replied 22 December 2009

yup its taxable

Vivek Jarial (Student) (272 Points)
Replied 22 December 2009

yeh it is taxable.....

Pushkar Mandke (CA and CMA) (Employee) (30 Points)
Replied 23 December 2009

Only taxable if the amount received as gift is above the threshold limit of Rs.50,000/-. If the amount is above the above stated limit the full amount will be taxable.

Taxable as Other Income If Cash is received.

Taxable as Capital Gains if received in kind.

NOTE : Rs.50,000/- should not be assumed as a basic slab for deduction from gift income !

C.Balaji (Learner) (1867 Points)
Replied 26 December 2009

gift received in cash or kind is taxable only for an individual or a HUF, if the gift received during a financial year exceeds Rs.50000/-

Amir (Learner) (4016 Points)
Replied 26 December 2009

Sec 28 has a clause(iv) which says "VALUE OF ANY BENEFIT OR PERQUISITE WHETHER CONERTIBLE INTO MONEY OR NOT AS A RESULT OF CARRYING ON THE BUSINESS OR PROFESSION" thus gift received by a Company will be covered u/s 28 and hence taxable...Even if it does not exceed Rs. 50k it will still be taxable in case of companies..

Whether The Company giving the gift will get deduction or not?? Answer lies in the Condition of Sec 37(1) that "THE EXPENDITURE MUST BE INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION"