|Question And Answer|
|Subject:||can the amount deposited in the account of wife on selling of land can be considered as gift under section 56(2)(vii), to the relative without any gift deed.|
|Querist:||KULDIP SINGH VIRK|
|Answered by:||Research Team|
|Tags:||advance paid to wife, clubbing, Gift|
|Date:||November 1, 2021|
Can the amount deposited in the account of wife on selling of land can be considered as gift under section 56(2)(vii), to the relative without any gift deed.
If the amount is given as Loan neither the provision of section 56(2) (viii) is applicable nor provision of section 64 (1)(iv) of the Income -tax Act. Treatment in the books of the account and in the books of account of the wife is relevant factor to decide whether it is gift or loan .
Gift is not defined under the Income -tax Act . Section 2 (xii) of the Gift tax Act 1955 defines gift . “ gift” means the transfer by one person to another of any existing moveable or immovable property made voluntarily and without consideration in money or money’s worth and includes the transfer or conversion of nay property referred in section 4 , deemed to be gift under that section .
Transfer of property Act ,1822 , Chapter VII deals with of Gifts. Section 122 defines Gift as under “Gift” is the transfer of certain existing movable or immoveable property made voluntarily and without consideration by one person , called the donor to another , called the donee and accepted by or on behalf of the donee .
Acceptance when to be made – Such acceptance must be made during life time of the donor and while he is still capable of giving .
If the done dies before acceptance , the gift is void .
Section 123 . Transfer , how effected .- For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor , and attested by at least two witness.
For the purpose of making a gift of moveable property , the transfer may be effected either by a registered instrument signed as aforesaid or by delivery .
We have explained the law . The facts will determine whether the transfer was gift or loan . The tax consultant may be able to guide better considering the facts of the assessee.