| TMI Short Notes |
Income from other sources - tax on gifts and receipt of any money or immovable property or specified movable property without or inadequate consideration - Scope of Section 56 expended - all categories of assessees shall be taxable - Budget 2017-18 w.e.f. AY 2018-19 |
Clause - 029 - Amendment of section 56. Clause 29 of the Bill seeks to amend section 56 of the Income-tax Act relating to income from other sources. The existing provisions of clause (vii) of sub-section (2) of the said section provide for taxability in the hands of individual or Hindu undivided family on receipt of any money or immovable property or specified movable property without or inadequate consideration, if the value of such receipt exceeds rupees fifty thousand. Further, clause (viia) of subsection (2) of the said section 56 provides for the taxability of receipt of shares of a closely held company by a firm or a closely held company for without or inadequate consideration, if the fair market value of shares exceeds fifty thousand rupees. However, the taxability under clause (vii) and clause (viia) of sub-section (2) of the said section is subject to certain specified exceptions. It is proposed to insert a new clause (x) in sub-section (2) of the said section so as to expand the scope of the provisions of the said section to all categories of assessees so that the assets received without or inadequate consideration may be brought to the tax. Further, the existing exception contained in the said section is proposed to be rationalised by including certain additional exceptions consequently, it is proposed to sun set clauses (vii) and (viia) of sub-section (2) of the said section. This amendment will take effect from 1st April, 2017.
Dated: 3-2-2017
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