Section 37 - Amendment of Act 18 of 1958 - Finance (No. 2) Act, 1971

CHAPTER V OTHER DIRECT TAXES 37. Amendment of Act 18 of 1958 In the Gift-tax Act, 1958, - (a) in section 2, in clause (xii), for the words and figure includes the transfer of any property deemed to be a gift under section 4 , the words and figure includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section shall be substituted with effect from the 1st day of April, 1972; (b) section 4 shall, with effect from the 1st day of April, 1972, be re-numbered as sub-section (1) thereof and after sub-section (1) as so re-numbered, the following sub-section shall be inserted with effect from that day, namely :- (2) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family (such property being hereafter in this sub-section referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, for the purpose of computation of the taxable gifts made by the individual, the individual shall be deemed to have made a gift of so much of the converted property as the members of the Hindu undivided family other than such individual would be entitled to, if a partition of the converted property had taken place immediately after such conversion. ; (c) in section 5, in sub-section (1), - (i) in clause (v), for the word and figures section 88 , the word, figures and letter section 80G shall be substituted, and shall be deemed to have been substituted with effect from the 1st day of April, 1968; (ii) in clause (va), in sub-clause (i), for the words, brackets and figures sub-section (6) of section 88 of the Income-tax Act, 1961 (43 of 1961) , the words, brackets, letters and figures clause (b) of sub-section (2) of section 80G of Income-tax Act shall be substituted, and shall be deemed to have been substituted with effect from the 1st day of April, 1968; (d) in section 33, in Explanation II, for the words Tax Recovery Officer and the Tax Recovery Commissioner referred to in the Income-tax Act or the rules made thereunder shall be deemed to be the Tax Recovery Officer and the Tax Recovery Commissioner , the words Tax Recovery Commissioner and the Tax Recovery Officer referred to in the Income-tax Act shall be deemed to be the Tax Recovery Commissioner and the Tax Recovery Officer shall be substituted with effect from the 1st day of January, 1972; (e) in section 45, after Explanation 2, the following Explanation shall be inserted, namely :- Explanation 3 : For the removal of doubts, it is hereby declared that the exemption admissible under clause (e) in relation to gifts made by an institution or fund referred to in that clause shall not be denied nearly on either or both of the following grounds, namely :- (i) that, subsequent to the gift, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11 of the Income-tax Act; (ii) that, under clause (c) of sub-section (1) of section 13 of the Income-tax Act, the exemption under section 11 of that Act is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 of the said Act where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent. of the capital of that concern. .