Section 56(2)(X): Taxation Of Gift Under Income Tax Act [Amended]

Taxation of Gift

1. An gift received by employee form employer due to employee and employer relationship always taxable under income from Salary.
2. Any gift/benefit/ perquisites arising due to business or profession is always taxable under profit or gain arising from business or profession.
3. Other gifts are taxable under the head Income From Other Sources.

Section 56(2)(x)- Gift Received Without Consideration or Low Consideration

Section 56(2)(x) provides that following receipts shall be taxed in hands of any person where received from any person or persons on or after 01.04.2017 during any previous year

Money Without Consideration

• Any sum of money received exceeds of Rs:50,000 then whole of amount shall be taxable

Movable property Without consideration

• If any movable property received without consideration and the aggregate Fair Market Value is exceeds the Rs:50,000 then the Fair Market Value shall be taxable.

Movable property Inadequate consideration

• If any movable property received inadequate consideration i.e (Fair Market Value – Consideration) is exceeds the Rs:50,000 then difference between the FMV and consideration shall be taxable.

Immovable property without consideration

• Immovable property received without consideration if Stamp Duty Value per property is exceeds Rs:50,000 then entire Stamp Duty Value shall be taxable.

Immovable property with Inadequate consideration

If Immovable property received with inadequate consideration per property then difference Between Stamp Duty Value and Consideration Shall be taxable if the following conditions are satisfied

• If the difference between Stamp Duty Value and Consideration is exceeds Rs:50,000 and
• Stamp Duty Value is more than 105% of consideration

Section 56(2)(x) Is Not Applicable

If Money or property received in following occasions then it is not taxable

• If it is received on the occasion of Marriage
• Received under will or Inheritance
• From any Hospital or medical institution
• From any university or educational institution
• From or by any Trust registered u/s 12AA/12AB
• From any local Authority defined u/s 10(20)
• From any individual by a trust created solely for the benefit of the relative of the individual
• From any relatives
• Received due to contemplation of Death

Movable property

Movable property means it includes

• Shares and Securities
• Jewellery
• Drawing
• Painting
• Archaeological collection
• Sculptures
• Any other work of art
• Bullion