Gift U/S 56(2)(vii)

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Gift [Sec.56(2)(vii)]

Gift [Sec. 56(2)(vii)]

Following receipts by an individual or a HUF shall be considered as his income:

Category	Nature of Receipt	Conditions to be satisfied for considering income	Extent of Income	Remarks
A	Any sum of money	During the previous year, such individual or HUF has received any sum of money (cash, cheque, draft, etc.) from one or more persons Such sum is received without consideration The aggregate value of such receipt during the previous year exceeds Rs.50000	The whole of the aggregate value of such sum shall be considered as income of that previous year.	Aggregate amount of cash gift received during the period shall be considered.
B	Any immovable property	During the previous year, such individual or HUF has received immovable property Such immovable property is received without consideration. The stamp duty value of such property exceeds Rs.50000 Such asset is a capital asset in hands of recipient.	The stamp duty value of such property shall be considered as income of that previous year.	The limit of Rs.50000/- is applicable per incidence
C	Any movable property	During the previous year, such individual or HUF has received movable property from one or more persons Such movable property is received without consideration The aggregate fair market value of such receipts during the previous year exceeds Rs.50000 Such asset is a capital asset in hands of recipient.	The whole of the aggregate fair market value of such property shall be considered as income of the previous year.	Aggregate amount of gift received during the period shall be considered.
D	Any movable property	During the previous year, such individual or HUF has received movable property from one or more persons Such movable property is received for a consideration. Such consideration is less than the aggregate fair market value of the property by an amount exceeding Rs.50000 Such asset is a capital asset in hands of recipient.	The aggregate fair market value of such property Less consideration paid, shall be considered as income of the previous year.	Aggregate amount of gift received during the period shall be considered.
Note: The limit of Rs.50000/- is also for per category. In other words, one may receive cash gift of Rs.35000 and gift in kind of Rs.36000 without attracting any tax.

Other Points

Fair market value of a property, other than an immovable property, means the value determined in accordance with the method as may be prescribed;

Exceptions to the provisions of sec. 56(2)(vii)
Property means the following capital asset of the assessee, namely
a. Immovable property being land or building or both
b. Shares & securities
c. Jewellery
d. Drawings
e. Paintings
f. Sculptures
g. Archaeological collections
h. Any work of art
i. Bullion (w.e.f. 01-06-2010)

Notes

Property does not include furniture, clothes, etc. (provided it does not fall in the definition of Jewellery).

If an assessee receives aforesaid assets without consideration (or against inadequate consideration in some cases) as stock in trade, the provision of this section shall not apply.

Stamp duty value means the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.

Dispute in stamp valuation: The Assessing Officer can refer the case to the Valuation Officer (as appointed under Wealth Tax Act) for the purpose of valuation of asset transferred if following conditions are satisfied:

Assessee claims before any Assessing Officer that the value adopted or assessed or assessable by such authority (i.e. Stamp Valuation authority) exceeds the fair market value of the property as on the date of transfer; and
The value so adopted or assessed by the stamp valuation authority has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court.

Consequences where the value is determined by the Valuation Officer

Case	Result
If the value determined by the Valuation Officer exceeds the value adopted or assessed for the purpose of stamp duty	Value adopted or assessed for the purpose of stamp duty shall be considered.
If the value determined by the Valuation Officer does not exceed the value adopted or assessed for the purpose of stamp duty	Value determined by the Valuation Officer shall be considered.