Income Tax : The removal of the provision means companies and investors are no longer taxed on share premiums exceeding fair market value, crea...
Income Tax : This explains how fair market value governs taxation under multiple provisions including gifts, ESOPs, and slump sales. It highlig...
Income Tax : Courts hold that one-time alimony is a capital receipt arising from extinguishment of rights and not taxable. The ruling clarifies...
Income Tax : The article explains how violating the twin conditions under Section 50C(2) can block valuation relief and trigger taxation on hig...
Income Tax : Overview of income taxed under other sources, including dividends, winnings, interest, deemed income, forfeited advances, family p...
Income Tax : Finance Bill 2024 proposes the sunset of Section 56(2)(viib) from April 2025, eliminating the tax on shares issued above face valu...
Income Tax : Amendment to section 56(2)(viib) of Act extending the applicability of section to issue of shares to non-residents has been made a...
Income Tax : CBDT proposes changes to Rule 11UA in respect of ANGEL TAX- Also proposes to notify Excluded Entities In the Finance Act, 2023, ...
Income Tax : IMB Certificate of Eligible Business is not a pre-requisite to avail the benefits of non-application of the provisions of clause (...
Income Tax : Representation for widening the scope of benefit in case of difference in agreement price and Circle Rate of property is upto 20 p...
Income Tax : Tribunal ruled that objections relating to defective title, encroachments, and legal disputes require proper valuation examination...
Income Tax : Tribunal ruled that future projections under DCF method cannot be tested solely against later actual financial performance. It obs...
Income Tax : The Supreme Court held that grants disbursed by a statutory corporation formed part of its core business functions and qualified a...
Income Tax : Madras High Court held that time-share membership fees could not be fully taxed in the year of receipt since the assessee had cont...
Income Tax : Mumbai ITAT held that Section 56(2)(x) applies to purchase of MHADA leasehold property rights despite reliance on Section 50C ruli...
Income Tax : Notification regarding Income-tax Act Section 56(2)(viib) and assessment of Startup Companies. Clarifications for assessing recogn...
Income Tax : CBDT) amends Income Tax Rule 11UA regarding valuation of unquoted equity shares for tax purposes. Learn about changes in this amen...
Income Tax : Details of Sixteenth Amendment to Income Tax Rules (2023) on computation of income chargeable under life insurance policies as per...
Income Tax : In the Finance Act, 2023, an amendment was introduced in this provision to bring the consideration received from non-residents wit...
Income Tax : CBDT issued Notification No. 29/2023- Income-Tax specifying certain classes of persons for the purpose of sub-clause (ii) of th...
Clearly, unless a receipt is not an income, there is no occasion for the provisions of Section 56(1) or 56(2) coming into play. Section 56 does not decide what is an income. What it holds is that if there is an income, which is not taxable under any of the heads under Section 14, i.e item A to E, it is taxable under the head income from other sources’.
It is proposed to amend the Act so as to provide that any shares received by an individual or HUF as a consequence of demerger or amalgamation of a company shall not attract the provisions of clause (vii) of sub-section (2) of section 56.
Samta Kamal Drolia Vs ITO (ITAT Ahmedabad) Assessee has received Rs. 2.20 Lakh from His Step Father and contended that he received the amounts in gift. The ld.AR has rejected the explanation of the assessee on the ground that the assessee is step-son of Donor, therefore, their relationship does not fall within the ambit of […]
Clause (viib) of sub section (2) of section 56 was inserted vide finance act, 2013 w.e.f 01.04.2013 i.e. for A. Y. 2013-14 to provide that where a closely held company issues its shares at a price which is more than its fair market value then the amount received in excess of fair market value of shares will be charged to tax in the hand of the company as income from other sources.
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 or HUF as income from other sources.
The Serendipity Apparels Pvt. Ltd. Vs. CIT (ITAT Ahmedabad)- The assessee has derived its lease rental income under the head from other sources. There is no dispute that the same is covered u/s.56(2)(iii) of the Act.
Any receipt without consideration or receipt with inadequate consideration from relatives (as defined under Income Tax Act) is not taxable. However, certain receipt without consideration or receipt with inadequate consideration even from non-relatives is not taxable.
In Layman’s language, gift is transfer of goods or property (movable or immovable) from one person to another without consideration. As per Income Tax Act, Receipt without consideration or Receipt with inadequate consideration, by individuals and Hindu Undivided Family is chargeable to Income Tax.
A careful reading of Section 56(2)(viia) lay down the following essential ingredients for the taxability of unlisted shares received by closely held company or firm or LLP as the case may be: (1). The shares (equity or preference) received, on or after 1-6-2010, are shares of a company in which the public is not substantially interested;
In the impugned year the blood relation is not necessary for the gift to be a genuine gift, but the relationship matters a lot. In all the probabilities the gift is found to be genuine as the donors have explained the source of gift, copy of bank accounts, income tax return.
