Income from Other Sources Step Brother or Step Sister Whether Relative for Purpose of Section 56(2)

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The Tax Publishers Income Tax--Income from other sources Step Brother or Step Sister Whether Relative for Purpose of Section 56(2) CA. Nisha Bhandari Under the Income tax Act if any sum of money or property is received without consideration or say as gift it is chargeable to tax as income from other sources subject to certain exceptions as provided under section 56(2)(x). One of the exception provided under the proviso to this section is gift received from the relative. Thus if gift is received from any relative as defined for the purpose of this section, the same will be exempt from tax. Recently an issue arose in Rabin Arup Mukerjea v. ITO 2025 TaxPub(DT) 1808 (Mum-Trib), as to whether the gift given by step sister to a step brother falls within the definition of 'relative' as given by section 56(2). The present write up discusses the decision of the Tribunal on this issue alongwith related statutory provision. 1. Receipt of any sum or property without consideration chargeable to tax under section 56(2)(x) 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. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Income from other sources

Step Brother or Step Sister Whether Relative for Purpose of Section 56(2)

CA. Nisha Bhandari

Under the Income tax Act if any sum of money or property is received without consideration or say as gift it is chargeable to tax as income from other sources subject to certain exceptions as provided under section 56(2)(x). One of the exception provided under the proviso to this section is gift received from the relative. Thus if gift is received from any relative as defined for the purpose of this section, the same will be exempt from tax. Recently an issue arose in Rabin Arup Mukerjea v. ITO 2025 TaxPub(DT) 1808 (Mum-Trib), as to whether the gift given by step sister to a step brother falls within the definition of 'relative' as given by section 56(2). The present write up discusses the decision of the Tribunal on this issue alongwith related statutory provision.

1. Receipt of any sum or property without consideration chargeable to tax under section 56(2)(x)

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.