Search Results For: 56


QUERY: The main object of the company is leasing of the premises. However, the company is having only one property as investment which is shown in the books of account. The said property is leased to a third party, whether the income of leasing of premises can be assessed as income from house property or business income. If the consolidated agreement is entered into for leasing of property and furniture can the AO bifurcate the expenses as a income from other sources and property income.
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The main object of the company is leasing of the premises. The company is having only one property shown as investment in the books of account and the said property is given on lease to third party as per the object of the company. Therefore, income from leasing is to be shown under the head “Profits and gains of business or profession”.

QUERY: Mr. X has purchased single premium money back plan of LIC; called New Bima Bachat Policy. Sum assured is Rs. 7,00,000/-. He has paid a single premium of Rs. 5,59,843/-. He will be getting Rs. 1,05,000/- as survival bonus after every three years from LIC during the span of 15 years and there after the sum assured with Bonus on maturity.

The survival bonus and sum assured with bonus, receivable during the life time of Mr. X, is taxable in his hands as there is no exemption available as per the provisions of section 10 (10D) of the Income tax Act. There will be TDS also on this amount. Mr. X has not claimed deduction under section 80C on this premium paid, which in any case would have been Rs. 70,000/- only.

In this connection, the following questions arise:

1. Is there any specific provision under the Income tax Act by which this amount is taxed under the head “Income from other sources”?

2. Is it possible to show the income under head Capital Gain?

3. Is there any provision to claim the investment made in the policy as cost against the survival benefits?

4. If yes then how the same is to be claimed i.e. can one claim the cost by dividing it against the survival benefit receivable after every three years and then pay tax on entire amount received on maturity.


5. If the investment made is not allowed to be deducted from the survival amount receivable, will it not be unconstitutional as this will amount to taxing gross receipt and not income.
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From the facts, it is clear that Mr. X has taken money back insurance policy called as New Bima Bachat Policy. As per the terms of the said policy, it is a single premium payment policy, where sum assured will be paid back to the policy holder in the form of survival benefit periodically.

QUERY: Does section 50C applicable to a gift of a flat to a non-relative? What would be implication under section. 50C as well as section 56(2)(vii) if such gift is revoked afterwards?
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A gift to non relative would attract section 56(2) and would be assessed in the hands of the recipient. In such case section 50C would not be attracted. Section 50C would be attracted when there is transfer of capital assets

QUERY: As per S. 56(2)(vii)(b), when an individual or HUF receives, on or after 1.10.2009, any immovable property without consideration, the stamp duty value of which exceeds Rs. 50,000, the stamp duty value of such property is chargeable to tax u/s. 56(2)(vii)(b). Agricultural land {which is not capital asset u/s. 2(14)} is immovable property. Therefore, is stamp duty value of agricultural land received {which land is admittedly not a capital asset u/s 2(14)} without consideration chargeable under this clause? This question arises since 2nd proviso to S. 56(2)(vii) inter alia provides that property received from any relative is not covered by this clause. The term ‘property’ is defined in Explanation (d) to S. 56(2)(vii) to mean the following capital asset of the assessee, namely, (i) immovable property being land or building or both. Thus, property is defined to mean capital asset namely immovable property being land or building or both but 56(2)(vii)(b) does not use the word ‘property’ but directly makes a reference to immovable property. The question is whether the term ‘capital asset’ used in Explanation (d) should be understood as it is defined in S. 2(14) or should it be understood to mean something which is not stock-in-trade?
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Yes, stamp duty value of agricultural land received without consideration exceeding Rs. 50,000/- is chargeable u/s. 56(2)(vii) of the Act except property received from relatives. The explanation (d) to the section

QUERY: Gift given by Nana or Nani (i.e. mother side of assessee) is taxable or not? Whether Nana / Nani is covered under the definition of ‘Relative’? Whether lineal ascended / descended is also covered by mother side of assessee?
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As per Explanation to section 56(2)(vii) “relative“ means in case of an individual:

(A) Spouse of the individual

(B) Brother or sister of the individual

QUERY: ‘X’ has taken one lakh rupees as a Cash Gift from his own brother’s son, whether taxable or not?
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Section 56(2)(vii) of the Income tax Act, 1961 reads as under:

“Where an individual or a Hindu Undivided Family receives, in any previous year, from any person or persons on or after

QUERY: What is the treatment of gifts received by HUF from its members or their relatives?
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U/s. 56(2)(vii) where an individual or HUF receives, in any previous year, from any person or persons on or after October 1, 2009, any sum of money without consideration the aggregate value which

QUERY: What are tax implication u/s. 56(2)(viia) in respect if gift of shares by one company to another company? Would it make difference if both companies has common shareholders? If all the shareholders are relatives with each other as defined u/s. 56 would be answer be different?
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Section 2(31) of the Act defines a “person”, which include (i) an individual, (ii) a HUF (iii) a company, (iv) a firm, (v) an AOP or BOI, whether incorporated or not (vi) a local authority and (vii) every artificial judicial person

QUERY: ‘X’ has taken one lakh rupees as a Cash Gift from his own brother’s son, whether taxable or not?
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Section 56(2)(vii) of the Income-tax Act, 1961 reads as under:

“Where an individual or a Hindu Undivided Family receives, in any previous year,