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Taxability of income from sale of kidney

CA ROSHAN TIWARI (salaried) (302 Points)

12 March 2013

if an individual earns an income of Rs. 25 lacs from sale of his/her kidney. what would be the tax implication? Will such income fall under the tax net.?

My knowledge says it is a personal moveable property and therefore not taxable. It will go untaxed .However, income from other sources is an area open to tax such a transaction. Would like to have expert view on this.

Regards,

Roshan Tiwari

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13 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 12 March 2013

I too think it will be non-taxable income. The nature of such a transaction is very very rare from a commercial point of view. Saving someone's life is one thing and earning some income by way of selling one's own kidney is another.

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Nakul Sharma (CA FINAL) (35 Points)
Replied 12 March 2013

xactly, but Income tax doesn't specifically provide for any such Income in India, neither any circular for the same has been issued... Since the practise is illegal as per ‘The Transplantation of Human Organs Act, 1994’ .

Santosh Mishra (AM) (1135 Points)
Replied 12 March 2013

When an income is earned on account of transacting the source itself, it is called Capital receipt. When a person selling his kidney, it is sort of transacting his capital, and capital receipts are generally Tax Free.

CA ROSHAN TIWARI (salaried) (302 Points)
Replied 13 March 2013

Yes, i agree that capital receipts are generally tax free unless specified as taxable as per basic concept of income tax .But the basic provisions of capital gains states that transfer of capital assets is subject to capital gain tax. Capital assets means property of any kind and has been defined in an exclusive manner.Personal moveable property has been excluded from the defination.
Now two question arises whether a kidney can be termed as personal moveable property?
another if not taxable under capital gain, is it not taxable under IFOS?

Santosh Mishra (AM) (1135 Points)
Replied 13 March 2013

Tiwari Ji

There is no straight answer to this question in tax laws. But I am sure it should not be taxable. There is no question of capital gain, how can one assess that it’s a LTCG or STCG and how one can determine original/acquisition cost of his kidney.

It can not be taxed as IFOS as it does not seem an income.

Why don’t you write to itprbangalore @ gmail.com, please do let us know the feedback you receive from them.

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CA ROSHAN TIWARI (salaried) (302 Points)
Replied 13 March 2013

Good reply Mishra ji,

I am going to write to the given address. And would surely give the feedback. I have also stated in my first post that it cannot be taxed under capital gain or under any other head. I only have a little doubt about its taxability under IFOS.

My reason for doubt is "Sarkar bolta hai ki income agar kiye ho to tax dena hoga". i.e . Every income is taxable unless excluded.

Bhav Bhuti Sharma (Towards Professionalism ) (823 Points)
Replied 13 March 2013

if we treat it as personal asset it will be exempt . But it dont even come under defination ..

Originally posted by : Santosh Mishra

Tiwari Ji

There is no straight answer to this question in tax laws. But I am sure it should not be taxable. There is no question of capital gain, how can one assess that it’s a LTCG or STCG and how one can determine original/acquisition cost of his kidney.

It can not be taxed as IFOS as it does not seem an income.

Why don’t you write to itprbangalore @ gmail.com, please do let us know the feedback you receive from them.

CA Jenish Mehta (Manager-Internal Audit) (185 Points)
Replied 13 March 2013

Good elements.

I think such income is not liable for tax & It is not capital receipt too.

ketan (CA Final) (303 Points)
Replied 13 March 2013

Well first of all selling of kidney is illegal (I think!)..

and well as even illegal income is taxable, It will come under Income tax..

Now, when suppose a star sells his hair it is taxed as a capital gains..

So I think it will be taxed as capital gains..

Santosh Mishra (AM) (1135 Points)
Replied 13 March 2013

I just came to know from one of my friends, people selling their blood in Tampa, U.S.A are being taxed on income by local tax authority.

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PSPSPS (Practicing) (1344 Points)
Replied 17 March 2013

Check the case Law of Shanti Bhusan v/s CIT New Delhi HC. It say Human Organs cannot be termed as Assets & nor can they be Capitalised. So Given this Interpretation of Heart in that case, How can Kidney be termed as a Capital Asset or a Product even to consider it as a Sale & Revenue Income. So all answers given above dont stand, except the One given about the Human Organs Transplant Act.

Santosh Mishra (AM) (1135 Points)
Replied 17 March 2013

Originally posted by : Praful Shah
	Check the case Law of Shanti Bhusan v/s CIT New Delhi HC. It say Human Organs cannot be termed as Assets & nor can they be Capitalised. So Given this Interpretation of Heart in that case, How can Kidney be termed as a Capital Asset or a Product even to consider it as a Sale & Revenue Income. So all answers given above dont stand, except the One given about the Human Organs Transplant Act.

So boss, what is your opinion?

they says all income are taxable unless excluded.

We all know this is not legal, but illegal income is also require to be offered to tax.

Columbia Asia Hospital (2 Points)
Replied 03 December 2020

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