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Section - 56   - Widening scope of Income from other sources : -

                                                                     

As per Section 56(2)(vii) any sum of money or any property which is received without consideration or for inadequate consideration (in excess of the specified limit of Rs. 50,000) by an individual or Hindu undivided family is chargeable to income-tax in the hands of the resident under the head "Income from other sources" subject to certain exceptions.

 

Further, receipt of certain shares by a firm or a company in which the public are not substantially interested is also chargeable to income-tax in case such receipt is in excess of Rs. 50,000 and is received without consideration or for inadequate consideration.

 

The existing definition of property for the purpose of this section includes immovable property, jewellery, shares, paintings, etc. These anti-abuse provisions are currently applicable only in case of individual or HUF and firm or company in certain cases. However, currently the  receipt of sum of money or property without consideration or for inadequate consideration is not applicable for other assesses.

In order to increase the scope of applicability of this section, it is proposed to insert 56 (2) (x)  to  include any person instead of individuals and HUF. However, it is also proposed to widen the scope of existing exceptions by including the receipt by certain trusts or institutions and receipt by way of certain transfers not regarded as transfer under section 47.

 

The amendment will be effective from 1st April 2017.


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