section 56

Exclusion of Tax neutral transfers from the scope of section 56

Income Tax - In order to further facilitate the transaction of money or property between a wholly owned subsidiary company and its holding company, it is proposed to amend the section 56 so as to exclude such transfer from its scope....

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Budget 2018 Impact on Deemed Income arising on sale/ purchase of immovable property

Income Tax - Article discusses Income Tax impact of union Budget 2018 on Deemed Income arising on sale/ purchase of immovable property under Section 50C, Section 56 and Section 43CA....

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No adjustment if variation between stamp duty value & sale consideration not exceeds 5%

Income Tax - Rationalization of section 43CA, section 50C and section 56. At present, while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed...

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Tax Treatment of Income from Other Sources

Income Tax - Any income which is not chargeable to tax under any other heads of income and which is not to be excluded from the total income shall be chargeable to tax as residuary income under the head Income from Other Sources....

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Taxability of Gift received by an individual or HUF with FAQs

Income Tax - Sum of money:-As per the provisions of the I-T Act, 1961 (the Act), any sum of money received by an individual or a Hindu undivided family in a particular financial year, without consideration, the aggregate value of which exceeds Rs 50,000 is taxable....

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Section 56: Increase exemption limit from Rs. 50,000 to Rs. 5 lakhs

Income Tax - The Finance Act, 2017 inserted a new clause (x) in sub-section (2) of section 56 so as to provide that receipt of the sum of money or the property by any person without consideration or for inadequate consideration in excess of Rs. 50,000 ...

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Section 56(2)(ix): Taxability of forfeited advance for transfer of a capital asset: Budget Suggestions

Income Tax - Clause (ix) is inserted in section 56(2) by Finance (No. 2) Act, 2014 to provide for taxability of any sum received as an advance or otherwise in the course of negotiations for transfer of capital asset. ...

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ICAI suggests inclusion of Relatives of HUF in Definition of term relative U/s. 56(2)(vii)

Income Tax - Under the existing provisions of section 56(2)(vii), any sum or property received by an individual or HUF for inadequate consideration or without consideration is deemed as income and is taxed under the head Income from other sources. ...

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Draft rules on valuation of ‘unquoted shares’ for Sec. 56(2)(x)/50CA

Income Tax - CBDT has released the draft rules prescribing ‘unquoted shares’ valuation for purposes of Sec. 56(2)(x)/50CA (an important development impacting corporate restructuring) inviting comments from public....

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No Addition U/s. 56 for Immovable Property received at less than stamp duty value

Income Tax - The existing provisions of section 56(2)(vii)(b)(ii) provide that where any immovable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding 50,000, the stamp duty value of such property as exceeds such consideration, shall be chargeable to tax in the hands of the individual...

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Sec. 56(2)(viib) Assessee can adopt a method of his choice to determine FMV of shares transferred

DCIT Vs M/s. Ozoneland Agro Pvt. Ltd. (ITAT Mumbai) - Section 56 allows the assessees to adopt one of the methods of their choice. But,the AO held that the assessee should have adopted only one method for determining the value of the shares.In our opinion,it was beyond the jurisdiction of the AO to insist upon a particular system, especially the Act al...

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SC on Taxability of interest on share application money deposited in bank

The Commissioner of Income Tax Vs M/s. Shree Rama Multi Tech Ltd (Supreme Court of India) - The present appeal has been preferred against the impugned final judgment and order dated 18.12.2012 passed by the High Court of Gujarat in Tax Appeal No. 235 of 2012 whereby the Division Bench of the High Court dismissed the appeal filed by the Revenue­the appellant herein against the judgment and...

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Section 80P: Interest on Surplus Fund invested in Short Term Deposits is Other Income

ITO Vs The New India Assurance Co. Ltd. Employees' Co-op. Credit Society Ltd. (ITAT Kolkata) - Hon’ble Supreme Court in the case of M/s. Totagars Co-operative Sale Society Ltd. is binding on the revenue authority for the proposition that the interest income arising out of surplus fund invested in short term deposits and securities is the income from other sources. ...

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ITAT explains Meaning of term “relative” in context of HUF

Subodh Gupta (HUF) Vs Pr CIT (ITAT Delhi) - While hearing the case of Subodh Gupta vs Commissioner of Income Tax (CIT), Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that gift received by Hindu Undivided Family (HUF) from the mother of Karta would attract Income Tax. ...

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AO cannot treat advances as gift merely on assumptions and presumptions

Shri Nilesh Janardan Thakur Vs. ITO (ITAT Mumbai) - Shri Nilesh Janardan Thakur Vs. ITO (ITAT Mumbai) The AOs case is that the assessee has received money without any consideration which is taxable under the provisions of section 56(2)(vi) of the Act. The AO has brought out number of reasons to come to the conclusion that money is taxable u/s 56(2)(v...

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Sec. 56(2)(viib) not applicable to startups having paid up share capital upto Rs. 10 crore

Notification No. G.S.R. 364(E) - (11/04/2018) - pproval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act -A Startup being a private limited company and in conformity with the definition as per definition stipulated at Para 1(a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2...

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No coercive recovery from Start ups for addition on Share Capital Valuation issue: CBDT

F.No. 173/14/2018-ITA.I - (06/02/2018) - It has been decided that in case of 'Start Up' companies which fall within the definition given in Notification of DIPP, Min. of Commerce & Industry, in G.S.R. 501(E) dated 23.05.2017, if additions have been made by the Assessing Officer under section 56(2)(viib) of the Act after modifying/rejecting...

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CBDT notifies rules to determine of Fair Market Value of unquoted shares

Notification No. 61/2017-Income Tax / G.S.R. 865(E) - (12/07/2017) - Determination of Fair Market Value for share other than quoted share. 11UAA. For the purposes of section 50CA, the fair market value of the share of a company other than a quoted share, shall be determined in the manner provided in sub-clause (b) or sub-clause(c),as the case may be, ...

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S.56 No Tax on Startup Shares issued about FMV: CBDT

Notification No. 45/2016-Income Tax - (14/06/2016) - Central Government, hereby notifies the 'classes of persons' for the purposes of section 56(2)(viib)(ii) as being the 'person' defined under sub-section (31) of section 2 of the said Act, being resident, who make any consideration exceeding the face value for issues of shares of a 'startup' company...

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Analysis of new valuation rules to determine fair market value of a property other then immovable property for the purpose of section 56

Notification No. 23/2010-Income Tax - (07/04/2010) - Notification No. 23/2010-Income Tax As per section 56(2)(vii)(c)(ii) of the Income-tax Act, 1961 (the Act) if an individual or a Hindu undivided family receives any property other than immovable property on or after 1 October 2009 for a consideration which is less than the Fair Market Value (FMV) of...

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Recent Posts in "section 56"

Sec. 56(2)(viib) Assessee can adopt a method of his choice to determine FMV of shares transferred

DCIT Vs M/s. Ozoneland Agro Pvt. Ltd. (ITAT Mumbai)

Section 56 allows the assessees to adopt one of the methods of their choice. But,the AO held that the assessee should have adopted only one method for determining the value of the shares.In our opinion,it was beyond the jurisdiction of the AO to insist upon a particular system, especially the Act allows to choose one of the two methods....

Read More

SC on Taxability of interest on share application money deposited in bank

The Commissioner of Income Tax Vs M/s. Shree Rama Multi Tech Ltd (Supreme Court of India)

The present appeal has been preferred against the impugned final judgment and order dated 18.12.2012 passed by the High Court of Gujarat in Tax Appeal No. 235 of 2012 whereby the Division Bench of the High Court dismissed the appeal filed by the Revenue­the appellant herein against the judgment and order dated 21.10.2011 passed by the In...

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Section 80P: Interest on Surplus Fund invested in Short Term Deposits is Other Income

ITO Vs The New India Assurance Co. Ltd. Employees' Co-op. Credit Society Ltd. (ITAT Kolkata)

Hon’ble Supreme Court in the case of M/s. Totagars Co-operative Sale Society Ltd. is binding on the revenue authority for the proposition that the interest income arising out of surplus fund invested in short term deposits and securities is the income from other sources. ...

Read More

Sec. 56(2)(viib) not applicable to startups having paid up share capital upto Rs. 10 crore

Notification No. G.S.R. 364(E) (11/04/2018)

pproval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act -A Startup being a private limited company and in conformity with the definition as per definition stipulated at Para 1(a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act, if the follo...

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No coercive recovery from Start ups for addition on Share Capital Valuation issue: CBDT

F.No. 173/14/2018-ITA.I (06/02/2018)

It has been decided that in case of 'Start Up' companies which fall within the definition given in Notification of DIPP, Min. of Commerce & Industry, in G.S.R. 501(E) dated 23.05.2017, if additions have been made by the Assessing Officer under section 56(2)(viib) of the Act after modifying/rejecting the valuation so furnished under Rule 1...

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Exclusion of Tax neutral transfers from the scope of section 56

In order to further facilitate the transaction of money or property between a wholly owned subsidiary company and its holding company, it is proposed to amend the section 56 so as to exclude such transfer from its scope....

Read More
Posted Under: Income Tax |

Budget 2018 Impact on Deemed Income arising on sale/ purchase of immovable property

Article discusses Income Tax impact of union Budget 2018 on Deemed Income arising on sale/ purchase of immovable property under Section 50C, Section 56 and Section 43CA....

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Posted Under: Income Tax |

No adjustment if variation between stamp duty value & sale consideration not exceeds 5%

Rationalization of section 43CA, section 50C and section 56. At present, while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed...

Read More
Posted Under: Income Tax |

ITAT explains Meaning of term “relative” in context of HUF

Subodh Gupta (HUF) Vs Pr CIT (ITAT Delhi)

While hearing the case of Subodh Gupta vs Commissioner of Income Tax (CIT), Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that gift received by Hindu Undivided Family (HUF) from the mother of Karta would attract Income Tax. ...

Read More
Posted Under: Income Tax |

Section 56: Increase exemption limit from Rs. 50,000 to Rs. 5 lakhs

The Finance Act, 2017 inserted a new clause (x) in sub-section (2) of section 56 so as to provide that receipt of the sum of money or the property by any person without consideration or for inadequate consideration in excess of Rs. 50,000 ...

Read More
Posted Under: Income Tax |
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