GIFT RECEIVED, CAPITAL RECEIPT OR REVENUE RECEIPT
This query is : Resolved
20 November 2007
Whether Gift received by some one (as permissible u/s. 56)is a Capital Receipt or an exempted Income?
20 November 2007
It is exempted if received from relative as defined u/s. 56 and for other limit is 50000/-
20 November 2007
Exempt upto Rs.50000. If received from relative then totally is exempt.
20 November 2007
If I have received a gift from my brother, I am not taxable under section 56, but if it is a income, under which section it is exempted? Is it not a Capital receipt?
20 November 2007
It is a capital receipt ,however as special provision is there to tax this income so it shall be calculated as per section 56 .If u are covered this section then it ios taxable .
20 November 2007
It means if some body has receive any gift (which is out of the purview of section 56) during the FY 06-07, there is no scope of showing the same in ITR-4
20 November 2007
Generally speaking gift is always capital receipt .But , the definition of Income has been amended in the Income Tax Act , to treat certain gifts as income .I am of the opinion that it is a case of deemed income .
Therefore , whatever gift is deemed as income , is to be classified as income ........others are capital receipt.
Therefore , whatever gift is deemed as income , is to be classified as income ........others are capital receipt.
20 November 2007
As stated by Mr.Sampat Jain gift is capital receipt.
In ITR 4,you have to show the gift under the head Income from other sources.
While introducing this section,lot of opposition raised from various experts.In my view income means,earning from some activity or earings due to some transaction or you have to invest either cash or brain in that activity.All other receipt to be treated as capital receipt.
In some foriegn cases also it was decided that,the Act cannot cover all the receipt as income.Act should give the oppurtunity to prove the real character of receipt but this Section 56 has not have such provision.
Because gift may be received from some third party also for love and affection.We cannot say that the relative alone show the love and affection.Though some perosons wrongly utilising the mode of gift to route the black money in white,in all circumstances,it cannot be true.
In some Decisions even cheque payment of gift also disallowed on the ground of genuiness of gift.
I feel that,this section has to be reviewed and some claused may be added to prove the genuiness of gift from non relative.
In ITR 4,you have to show the gift under the head Income from other sources.
While introducing this section,lot of opposition raised from various experts.In my view income means,earning from some activity or earings due to some transaction or you have to invest either cash or brain in that activity.All other receipt to be treated as capital receipt.
In some foriegn cases also it was decided that,the Act cannot cover all the receipt as income.Act should give the oppurtunity to prove the real character of receipt but this Section 56 has not have such provision.
Because gift may be received from some third party also for love and affection.We cannot say that the relative alone show the love and affection.Though some perosons wrongly utilising the mode of gift to route the black money in white,in all circumstances,it cannot be true.
In some Decisions even cheque payment of gift also disallowed on the ground of genuiness of gift.
I feel that,this section has to be reviewed and some claused may be added to prove the genuiness of gift from non relative.
21 November 2007
I would like to resubmit that- If the gift received is taxable u/s. 56, it is to be shown as Income from other sources otherwise it will be treated as Capital Receipt and there is no scope or provision for showing the same in ITR-IV or oter nw forms of ITR. Am I Correct?
22 November 2007
I would like to resubmit that- If the gift received is taxable u/s. 56, it is to be shown as Income from other sources otherwise it will be treated as Capital Receipt and there is no scope or provision for showing the same in ITR-IV or oter nw forms of ITR. Am I Correct?
10 March 2008
Yes sir , You are correct.
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