Urgent ....... u/s 56(2)(vii) aggregate gift taxable

Tax queries 1314 views 4 replies

Rahul Agrawal

Tax Consultant

25 Points Posted on 16 February 2014

Dear Experts,

U/s 56(2)(vii) Aggregate Gift which exceeds Rs. 50,000, the whole is taxable !...............than

If Amit received following gifts in F.Y. 2013-14, what is taxable in his hands :-

(1) Cheque of Rs. 50,000/- on dt. 01/07/2013 as gift from relative (not covered in relative list).

(2) Cash of Rs. 1,000/- on dt. 02/07/2013 as gift from relative (not covered in relative list).

(3) Cash of Rs. 35,000/- on dt. 03/07/2013 as gift from relative (not covered in relative list).

Also tell us if this sequence is reversed, i.e. if Amit received following gifts in F.Y. 2013-14, what is taxable in his hands :-

(1) Cash of Rs. 35,000/- on dt. 01/07/2013 as gift from relative (not covered in relative list).

(2) Cash of Rs. 1,000/- on dt. 02/07/2013 as gift from relative (not covered in relative list).

(3) Cheque of Rs. 50,000/- on dt. 03/07/2013 as gift from relative (not covered in relative list).

Replies (4)

Mrunmayee Limaye

Article

32 Points Posted on 17 February 2014

Dear Sir... I feel the entire amount of Rs. 86,000/- shall be taxable as Income from Other Sources for A.Y. 2014-15 in both the cases.... Beacuse in case of gift in the form of money, Section 56(2)(vii) uses the word "a sum of money exceeding Rs. 50,000".... and hence in the given situation, since sum of amount received during the year exceeds Rs. 50,000, entire gift of Rs. 86,000 shall be taxable.... Thank you....

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Posted on 17 February 2014

Yes, Mrunmayee Limaye is correct!!!

Any sum of money whether in kind or in the form of cheque or in cash where Aggregate of such gifts received in that Financial year exceeds rs 50000,you are liable to pay tax under the head" Income from other sources".So it is immaterial whether it is in cash or cheque.Furthur Entire amount of gift is taxable if the value of gift in terms of money exceeds rs50000,so there is No basic exemption of rs50000 for gifts and entire amount subjected to tax.Therefore entire 86000 willbe taxable

Rajesh M Patel

CA Student

54 Points Posted on 18 February 2014

Irrespective of date and way (I.e Cash or Cheque) the whole amount is taxable if it exeecs exemption limit

AVTAR SINGH

Expert

1873 Points Posted on 22 February 2014

As per section 56(2)(vii) where any sum of money exceeding Rs.50000 is received without consideration by an individual or a Hindu undivided family from any unrelated person, the whole of such sum shall be taxable.