The Tax Publishers

Income from Undisclosed Sources

No Occasion Required to Prove Genuineness of Gift out of Natural Love and Affection

CA. Manoj Gupta

section 56(2)(x) provides that any sum of money received in excess of Rs. 50,000 in aggregate shall be liable to tax, except where such sum of money is received from relative specified therein. Revenue in order to bring such gifts to tax has started invoking Section 68 by alleging that since there was no occasion for gift, hence, money received is chargeable to tax as unexplained receipt. The courts/tribunals have so far held that Section 68 cannot be invoked just on allegation that there was no occasion for gift.

1. Relevant provisions

Section 56(2)(x) provides that following receipts shall be taxed in the hands of any person where received from any person or persons on or after 1-4-2017 during any previous year.

(a) Any sum of money exceeding Rs.50,000 in aggregate without consideration.

(b) Any immovable property received without consideration, if the stamp duty value of such property exceeds Rs.50,000.

(c) Any immovable property received for a consideration which is less than the stamp duty value of the property by an amount exceeding Rs.50,000.

The Finance Act, 2018 has amended Section 56(2)(x) from the assessment year 2019-20 so as to provide that any immovable property records for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely :--

(i) the amount of fifty thousand rupees; and

(ii) the amount equal to five per cent of the consideration.

(d) Any property other than immovable property received without consideration, if the aggregate fair market value of such property exceeds Rs.50,000.

(e) Any property other than immovable property received for a consideration where such consideration is less than the aggregate fair market value of such property by an amount exceeding Rs.50,000.

Further, Section 49(4) provides that the cost of acquisition of the asset referred to in Section 56(2)(x) shall be the value taxed under Section 56(2)(x).

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com