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Income from other source

istiyaque khan (Student) (12 Points)

14 May 2020

what would be tax treatment when a person received property from his mother's maternal uncle

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Asha Kanta Sharma (Manager - Finance & Accounts) (36393 Points)
Replied 14 May 2020

Any transfer of property under a gift is not considered as a taxable transfer, in the hands of the transferor

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istiyaque khan (Student) (12 Points)
Replied 14 May 2020

But what about transferee

Anil (Auditor) (40 Points)
Replied 14 May 2020

I think, any tax is not applicable when you receive property from a relative, rather, tax will be applicable on the consideration value when the same property is disposed off. However, please get clarified in this regard.

istiyaque khan (Student) (12 Points)
Replied 14 May 2020

I know the provision of section 58(2)(x) of IT act 1961 but when received from mother's maternal uncle then what would be the tax treatment

Asha Kanta Sharma (Manager - Finance & Accounts) (36393 Points)
Replied 14 May 2020

I think it will come under "RELATIVE"

(2) Section 56(2)(x), Not to Apply in certain cases

Section 56(2)(x), shall not apply to any sum of money or any property received—

from any relative; or
on the occasion of the marriage of the individual; or
under a will or by way of inheritance; or

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CA Akshay Jayaswal (Chartered Accountant) (31 Points)
Replied 14 May 2020

If it is received as gift :- then there will be NO capital gain however 56(2)(x) will be attracted in the hands of receiver for any property received without any consideration or less than amount of stamp duty value & such amount will be taxable under Income from other source. because Mother's maternal uncle is not covered under definition of relative.

Asha Kanta Sharma (Manager - Finance & Accounts) (36393 Points)
Replied 14 May 2020

Hello CA Akshay Jayaswal Thanks a lot for your clarification on this...

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istiyaque khan (Student) (12 Points)
Replied 14 May 2020

Thanyou CA Akshay jayaswal for your clarification in this regard

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rama krishnan (12244 Points)
Replied 15 May 2020

If the transferor is assessee's uncle (maternal uncle) then there's no tax liability either in the hands of transferor or in the hands of transferee. however if the transferor is mother's uncle, then capital gain tax will be charged in the hands of transferor and tax will be charged under the section 56(2)(x) in the hands of transferee

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CA Akshay Jayaswal (Chartered Accountant) (31 Points)
Replied 15 May 2020

I would like to add clarity on the above clarification given by Rama that if transferor is mother's uncle (which is not fall under defination of relative for sec 56(2)(x)) who transfer property as Gift then there would be no capital gain in the hands of transferor (because gift is not fall under defination of TRANSFER & for the chargeable capital gain there must be Transfer) hence capital gain will not arise but 56(2)(x) would be apply in the hands of transferee & amount will be taxable under income from other sources.