GIFTS - EXEMPTED IN CERTAIN CASES

[RUPESH NAGPAL]

Gifts from these 36 Relatives are tax free!

As we all are aware of about the taxability of Gifts as the amended provisions of the Income Tax Act, 1961.

I have tried to summarize the available list of relatives , in whose cases the amount of gift received from them is exempted from the taxing provisions of the Section 56(2)(vii).

Firstly we need to give a plain reading to the aforesaid section

Section 56(2)(vii) says

 Where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,-

       (a)  any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;

       (b)  any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;]

       (c)  any property, other than immovable property,-

               (i)  without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;

              (ii)  for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration :

                   Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections

shall be chargeable to income-tax under the head "Income from other sources"

                   Provided further that this clause shall not apply to any sum of money or any property received-

       (a)  from any relative; or

       (b)  on the occasion of the marriage of the individual; or

       (c)  under a will or by way of inheritance; or

       (d)  in contemplation of death of the payer or donor, as the case may be; or

       (e)  from any local authority as defined in the Explanation to clause (20) of section 10; or

        (f)  from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or

       (g)  from any trust or institution registered under section 12AA.

                   Explanation.-For the purposes of this clause,-

              (a)  "assessable" shall have the meaning assigned to it in the Explanation 2 to sub-section (2) of section 50C;

              (b)  "fair market value" of a property, other than an immovable property, means the value determined in accordance with the method as may be prescribed ;

              (c)  "jewellery" shall have the meaning assigned to it in the Explanation to sub-clause (ii) of clause (14) of section 2;

              (d)  "property"  [means the following capital asset of the assessee, namely:-]

                      (i)  immovable property being land or building or both;

                     (ii)  shares and securities;

                    (iii)  jewellery;

                    (iv)  archaeological collections;

                     (v)  drawings;

                    (vi)  paintings;

                    (vii)  sculptures;

                   (viii)  any work of art; [or]

                   (ix)  bullion;]

              (e)  "relative" shall have the meaning assigned to it in the Explanation to clause (vi) of sub-section (2) of this section;

              (f) "stamp duty value" means the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property;]

                     Explanation.-For the purposes of this clause, "relative" means-

                     (i)  spouse of the individual;

                     (ii)  brother or sister of the individual;

                     (iii)  brother or sister of the spouse of the individual;

                     (iv)  brother or sister of either of the parents of the individual;

                     (v)  any lineal ascendant or descendant of the individual;

                     (vi)  any lineal ascendant or descendant of the spouse of the individual;

                     (vii)  spouse of the person referred to in clauses (ii) to (vi)

Based on aforesaid definition , here is the list 36 kinds of relations  , gift from whom is not taxable in your hand

Gifts from these persons not taxable

Sr. No.	DONOR'S RELATIVE
1	Wife/ Husband
2	Brother
3	Sister
4	Husband's Brother
5	Husband's Sister
6	Wife's Brother
7	Wife's Sister
8	Father
9	Mother
10	Father's Brother
11	Father's Sister
12	Mother's Brother
13	Mother's Sister
14	Son
15	Daughter
16	Grandson
17	Grand Father
18	Grand Mother
19	Great Grand Father
20	Great Grand Mother
21	Wife/Husband 's Father
22	Wife/Husband's Mother
23	Wife/Husband's Grand Father
24	Wife/Husband's Grand Mother
25	Wife/husband's Great Grand Father
26	Wife/Husband's Great Grand Mother
27	Brother's Wife
28	Sister's Husband
29	Father's Brother's Wife
30	Father's Sister's Husband
31	Mother's Brother's Wife
32	Mother's Sister's Husband
33	Daughter's Husband
34	Son's Wife
35	Wife/Husband's  Brother's Wife
36	Wife/Husband's  Sister's Wife

I wish this be the complete list.

Thanks