Section – 56(2)(X)

Purchase / Gifts received by any Person: Sec. 56(2)(x) [Added by Finance Act 2017]

The following shall be taxable under the head “Income from Other Sources”:

Where any Person receives, in any PY, from any person or persons on or after 1st April 2017 –

(a) Any sum of Money,without consideration, the aggregate value of which exceeds ₹.50,000, the wholeof the aggregate value of such sum,

(b)    Any Immovable Property,

(i)  without consideration, the stamp duty value of which exceeds ₹. 50,000, the stamp duty value of such property,

(ii) fora consideration, the stamp duty value of such property exceeds such consideration, if such excess is more than the higher of the following amounts,namely :-
(i) the amount of ₹. 50,000; and
(ii) the amount equal to five per cent of the consideration
(Amended by the Finance Act, 2018)

FirstProviso :
Where the date of agreement fixing the amount of sale consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement may be taken for the purpose of this sub-clause.

Second Proviso:
The provisions of the first proviso shall apply only in a case where the amount of sale consideration, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through bank account, on or before the date of agreement for transfer of such immovable property.

ThirdProviso :
Where the stamp duty value of immovable property is disputed by the assessee on the grounds mentioned in sub-section (2) of sec. 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of sec. 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for the valuation of capital asset.

(c)  Any Property (Shares,Securities, Jewellery, Drawings, Paintings, Sculptures, Any art of work,Bullion) other than immovable property,
(i)  without consideration, the aggregate fair market value of which exceeds ₹.50,000, the whole of the fair market value of such property,
(ii) fora consideration which is less than the aggregate fair market value of the property by an amount exceeding ₹.50,000, the aggregate fair market value of such property as exceeds such consideration,

The above clause shall not applyto any sum of money or any property received from the following specifiedpersons :

(i) from any relative, or
(ii) on the occasion of the marriage of the individual, or
(iii) under a will or by way of inheritance, or
(iv) in contemplation of death of the payer or donor, or
(v) from any local authority, or
(vi) from any trust/foundation/university/other educational institution/hospital/other medical institution/any trust referred in sec. 10(23C), or
(vii) from any trust or institution u/s. 12AA, or
(viii) by any fund/trust/institution/any university/other educational institutions/any hospital/other medical institution referred to in sub-clause (iv) /(v) / (vi)/(via) of clause (23C) of sec.10, or
(ix) by way of transaction not regarded as transfer under clause (i) /(iv) /(v) /(vi) /(via) /(viaa) /(vib)/(vic) /(vica) /(vicb) /(vid) /(vii) of sec. 47, or
(x) from an individual by a trust created or established solely for the benefit of relative of the individual.

Clarification from Finance Ministry
Sec. 56(2) (x) shall apply if property is in the nature of “Capital Asset” in the hands of recipient. If property is Stock-in-Trade, Raw material and Consumable stores of a business in hands of recipient, then sec. 56(2) (x) is not applicable.

—Falguni Ghediya (CA Final)