section 56

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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Start-Up – A Growth Engine For Economy

Income Tax - Start-up India is a flagship initiative, launched by government in January 2016, within the ambit of the ‘Make in India’ programme. Start-up India was brought in with the intention to build a strong eco-system for promoting innovation, improve sustainable economic growth and to generate large scale employment opportunities....

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Open Letter to FM: Suspend Section 43CA & 56(x) to revive Sick Real Estate Companies

Income Tax - Real Estate Sector needs a bigger dose of corrective measures and concessions to bring out this sector from the red. One of the Demands of the Real Estate Sector is to Suspend Section 43CA & Section 56 (x) of the Income Tax Act....

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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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Vicious Circle of Setting up of Over-Ambitious Revenue Collection Targets

Income Tax - The Vicious Circle of Setting up of Over-Ambitious Revenue Collection Targets – Revenue Authorities Over-Reaching Taxpayers- Withholding of Refunds!! With a view to provide the much needed stimulus and push to the falling GDP growth rate and the currently prevailing slow-down in economy, the Hon’ble Finance Minister (FM) Smt. Nirmala ...

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No scrutiny of Start-ups related to valuations of share premiums 

Income Tax - Start-ups and their investors filing requisite declarations not to be subjected to any scrutiny regarding valuations of share premiums  E-verification mechanism proposed for establishing identity of the investor and source of his funds TV programme proposed exclusively for Start-ups within the DD bouquet of channels Government to launch ...

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CBDT Circular on anti-abuse provisions in cases of receipt of shares

Income Tax - Central Board of Direct Taxes had issued Circular 10/2018 dated 31.12.2018 to clarify that provisions of section 56(2)(viia) of the Income-tax Act, 1961 being anti-abuse provisions shall not be applicable in cases of receipt of shares by the specified company or firm as result of fresh issuance of shares including by way of bonus shares, ...

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6 Suggestions for Amendments in Income Tax Act by BCAS

Income Tax - Bombay Chartered Accountants' Society has made a Representation on 'Suggestions for Amendments in the Income Tax Act', on 24th May, 2019, to the Joint Secretary TPL, Central Board of Direct Taxes, Ministry of Finance, Government of India....

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DIPP Clarification on IT Notice to Angel Investors/Start-ups

Income Tax - The Department of Industrial Policy & Promotion(DIPP) has taken notice of the news reports regarding issue of notices by Income Tax authorities to Angel Investors/Start-ups. DIPP in consultation with the Department of Revenue (DoR) has put in place a mechanism since April 2018 to grant exemption from the provisions of Section 56(2)(vi...

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Allow CMAs to do Valuation under Section 56 r.w. Rule 11UA

Income Tax - Income Tax Rule 11UA deals with Valuation of jewellery, archaeological collections and shares and securities for the purpose of Section 56. Erstwhile as per Clause (b) of Sub-Rule 2 of Rule 11UA earlier merchant banker and Chartered Accountant were allowed to do valuation of unquoted equity shares under Discounted Free Cash Flow method bu...

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S. 56(2)(viib): AO cannot discard assessee’s method of Share Valuation

Narang Access Pvt. Ltd. Vs DCIT (ITAT Mumbai) - Narang Access Pvt. Ltd. Vs DCIT (ITAT Mumbai)  In the present case the valuation done by the assessee for valuing its shares is on the basis of DCF method and the AO could not have substituted it by NAV method rather he should have arrived at another value, if any, by applying DCF method only. [&he...

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Valuation of shares should be based on various factors and not merely on financials

M/s India Convention and Culture Centre Pvt. Ltd. Vs ITO (ITAT Delhi) - Valuation of the shares should be made on the basis of various factors and not merely on the basis of financials and the substantiation of the fair market value on the basis of the valuation done by the assessee simply cannot be rejected where the assessee has demonstrated with evidence that the fai...

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Section 56(2)(vii)(b) applies to rural agricultural land acquired below stamp value

ITO Vs Shri Trilok Chand Sain (ITAT Jaipur) - The limited point of dispute is the nature of immovable property which has been purchased by the assessee. The assessee’s contention is that which he has purchased are three plots of agricultural land and the same doesn’t fall in the definition of capital asset as per the provisions of Section 2...

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Share valuation report without scientific basis can be rejected

M/s. Innoviti Payment Solutions Pvt. Ltd. Vs ITO (ITAT Banglore) - M/s. Innoviti Payment Solutions Pvt. Ltd. Vs ITO (ITAT Banglore) (1) The AO can scrutinize the valuation report and the if the AO is not satisfied with the explanation of the assessee, he has to record the reasons and basis for not accepting the valuation report submitted by the assessee and only th...

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Gift by individual to HUF is exempt same as a gift from HUF to its member

Pankil Garg Vs  PCIT (ITAT Chandigarh) - Amount received by assessee from ‘HUF’, being its member, was a capital receipt in his hands and was not exigible to income tax as in case of individual, the HUF has not been included in the definition of relative in explanation to section 56(2) (vii) as it was not so required because in case of...

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Consolidated circular for Income Tax assessment of Startups

Circular No. 22/2019-Income Tax - (30/08/2019) - In case of Startup companies recognized by Department for Promotion of Industry and Internal Trade (DPIIT) which have filed Form No. 2 and whose cases are under limited scrutiny on the single issue of applicability of section 56(2)(viib) of the Income-tax Act, 1961 (the Act),the contention of the as...

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CBDT simplifies process of assessment in respect of Startups

NA - (10/08/2019) - In case of Startup Companies recognized by DPIIT which have filed Form No. 2 and whose cases are under limited scrutiny on the single issue of applicability of section 56(2)(viib),the contention of the assessee will be summarily accepted....

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Angel Taxation | Assessment Procedure of startup Companies | Section 56

Circular No 16/2019-Income Tax - (07/08/2019) - Following procedure is laid down with regard to the assessment of such startup entities involving the issue of section 56(2)(viib). (i) Where the Startup Company has been recognised by the DPIIT but the case is selected under "limited scrutiny" on the single issue of applicability of section 56 (2)(...

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No Angel tax on issuance of shares up to Rs. 25 crore

Notification No. G.S.R. 127(E) - (19/02/2019) - A Start-ups will be eligible for exemption under Section 56 (2) (viib) of Income Tax Act, if it is a private limited company recognized by DPIIT and is not investing in any of the following assets: i. building or land appurtenant thereto, being a residential house, other than that used by the Start-...

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Angel Tax Relief U/s 56(2)(viib)- DIPP Notification

G.S.R. 34(E) - (16/01/2019) - A Startup which is recognised by DIPP under para 2(iii) (a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2) to section 56 of the Act for the shares already issued or proposed to be issued if the following conditions are fulfilled‑...

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Recent Posts in "section 56"

S. 56(2)(viib): AO cannot discard assessee’s method of Share Valuation

Narang Access Pvt. Ltd. Vs DCIT (ITAT Mumbai)

Narang Access Pvt. Ltd. Vs DCIT (ITAT Mumbai)  In the present case the valuation done by the assessee for valuing its shares is on the basis of DCF method and the AO could not have substituted it by NAV method rather he should have arrived at another value, if any, by applying DCF method only. […]...

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Valuation of shares should be based on various factors and not merely on financials

M/s India Convention and Culture Centre Pvt. Ltd. Vs ITO (ITAT Delhi)

Valuation of the shares should be made on the basis of various factors and not merely on the basis of financials and the substantiation of the fair market value on the basis of the valuation done by the assessee simply cannot be rejected where the assessee has demonstrated with evidence that the fair market value of the asset is much more...

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Tax Treatment of Income from Other Sources

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....

Read More
Posted Under: Income Tax |

Start-Up – A Growth Engine For Economy

Start-up India is a flagship initiative, launched by government in January 2016, within the ambit of the ‘Make in India’ programme. Start-up India was brought in with the intention to build a strong eco-system for promoting innovation, improve sustainable economic growth and to generate large scale employment opportunities....

Read More
Posted Under: Income Tax |

Section 56(2)(vii)(b) applies to rural agricultural land acquired below stamp value

ITO Vs Shri Trilok Chand Sain (ITAT Jaipur)

The limited point of dispute is the nature of immovable property which has been purchased by the assessee. The assessee’s contention is that which he has purchased are three plots of agricultural land and the same doesn’t fall in the definition of capital asset as per the provisions of Section 2(14) of the Act and provisions of sectio...

Read More

Open Letter to FM: Suspend Section 43CA & 56(x) to revive Sick Real Estate Companies

Real Estate Sector needs a bigger dose of corrective measures and concessions to bring out this sector from the red. One of the Demands of the Real Estate Sector is to Suspend Section 43CA & Section 56 (x) of the Income Tax Act....

Read More
Posted Under: Income Tax | ,

Share valuation report without scientific basis can be rejected

M/s. Innoviti Payment Solutions Pvt. Ltd. Vs ITO (ITAT Banglore)

M/s. Innoviti Payment Solutions Pvt. Ltd. Vs ITO (ITAT Banglore) (1) The AO can scrutinize the valuation report and the if the AO is not satisfied with the explanation of the assessee, he has to record the reasons and basis for not accepting the valuation report submitted by the assessee and only thereafter, he can […]...

Read More

Taxability of Gift received by an individual or HUF with FAQs

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....

Read More
Posted Under: Income Tax |

Consolidated circular for Income Tax assessment of Startups

Circular No. 22/2019-Income Tax (30/08/2019)

In case of Startup companies recognized by Department for Promotion of Industry and Internal Trade (DPIIT) which have filed Form No. 2 and whose cases are under limited scrutiny on the single issue of applicability of section 56(2)(viib) of the Income-tax Act, 1961 (the Act),the contention of the assessee will be summarily accepted....

Read More

Vicious Circle of Setting up of Over-Ambitious Revenue Collection Targets

The Vicious Circle of Setting up of Over-Ambitious Revenue Collection Targets – Revenue Authorities Over-Reaching Taxpayers- Withholding of Refunds!! With a view to provide the much needed stimulus and push to the falling GDP growth rate and the currently prevailing slow-down in economy, the Hon’ble Finance Minister (FM) Smt. Nirmala ...

Read More
Posted Under: Income Tax |

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