Exemption u/s. 5(1)(v) of the Gift-tax Act, 1958—Gift other than a sum of money - Income Tax - 284/1980

Exemption u/s. 5(1)(v) of the Gift-tax Act, 1958—Gift other than a sum of money Circular No. 284 Dated 13/10/1980 To All Commissioners of Income-tax/ All Commissioners of Gift-tax. Sir, Subject : Exemption u/s. 5(1)(v) of the Gift-tax Act, 1958—Gift other than a sum of money. The question as to whether gifts in kind made by any person would be eligible for exemption under section 5(1)(v) of the Gift-tax Act, 1958, has been considered by the Board in consultation with the Ministry of Law. 2. The Board have been advised that a gift other than a sum of money would not be eligible for such exemption in view of the Explanation 5 to section 80G of the Income-tax Act, 1961, inserted by the Finance Act, 1976, with effect from 1-4-76. 3. Explanation 5 to section 80G of the Income-tax Act, 1961, provides "for the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is a sum of money". Under section 5(1)(v) of the Gift-tax Act, 1958, gift-tax shall not be charged in respect of gifts made "to any institution or fund established or deemed to be established for a charitable purpose to which the provision of section 80G of the I.T. Act, 1961, apply". Since the provisions of section 80G would be applicable only in respect of the donation or gifts which would be a sum of money as per Explanation 5 thereof, it follows that exemption under section 5(1)(v) of the Gift-tax Act, 1958, would also be restricted to such gifts. 4. The above clarification may be brought to the notice of all officers working in the field. Yours faithfully, (Sd.) P.K. Chopra Under Secretary, Central Board of Direct Taxes.