Gifts exceeding Rs 50000

Hi Mr Mandhana,

You are right, Sir!

Indeed gifts received from a number of strangers would be taxable inthe recipient's hands if the aggregate amount in the recipient'shands exceeds Rs 50000, even if the individual amounts are eachbelow Rs 50000.Actually, before 1st April 2006, the position was this:[(v)where any sum of money exceeding twenty-five thousand rupees isreceived without consideration by an individual or a Hindu undividedfamily from any PERSON on or after the 1st day of September, 2004but before the 1st day of April, 2006, the whole of such sum]1st April 2006 onwards we have the following position:[(vi) where any sum of money, the aggregate value of which exceedsfifty thousand rupees, is received without consideration, by anindividual or a Hindu undivided family, in any previous year fromany PERSON OR PERSONS on or after the 1st day of April, 2006, thewhole of the aggregate value of such sum]There was definitely a lacuna in the earlier provision in that itreferred to a PERSON. So under the earlier provision, an assesseecould accept gifts of Rs 25000 each from a number of persons andescape taxation on the ground that the amount of gift from eachperson did not exceed Rs 25000, since Section 56(2)(v) referred toa "person".But clause (vi) applicable w.e.f 01.04.2006 has plugged thisloophole by adding plural to the singular--"person or persons".Thanks for pointing this out. But you are not right when yousay "all gifts received by HUF from any person are taxable". Thefirst two cases—-a and b—-of the proviso to clause (vi) are notapplicable to HUFs. But the remaining viz. receipt under a will, incontemplation of death of the payer, etc are very much available toan HUF. If c,d,e,f and g too are restricted to an individual only,what is the word "HUF" doing there in the main clause (vi) ofSection 56(2)?Thanks,CA Sanjeev Bedi--- In

ICAI_CIRC_MEERUT_CA@yahoogroups.com, "Mandhana & AssociatesCA" wrote:>> Dear Sanjeev,>> Really a very good analysis of HUF realted provisions.But i m alittle bit> confuse with following words " Strangers can make gifts but onlyupto Rs> 50000 (Section 56). And you will have a hard time explaining thebenevolence> of strangers if you have a number of them contributing Rs 50000each". I> think->> 1) In case of HUF, no person is defined as realtvie. Relatives of> Karta/Co-parceners are not in the cataogry of doners givingexempted gifts.> According to me, all gifts received by HUF from any person aretaxable>> 2) Cap of Rs. 50000 is for all gifts taken together, since the word> "aggregate value of which....." are used in S. 56(2)(vi). I dontthink the> cap of Rs. 50000 is per donee either in case of ind./HUF.>> Regards>> --> CA. Rajendra S Mandhana> Mandhana & Associates> Jalna.> Cell- 09373615304>