| Question And Answer | |
|---|---|
| Subject: | Whether gift my maternal grandmother to the grand son is considered as relative and exempt u/s 56 (2)(x) of the Act? |
| Category: | Income-Tax |
| Querist: | Sree Lekha |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Exemption u/s 56(2)(x), Gift, grand mother, Relative |
| Date: | June 10, 2021 |
Is gift by maternal grandmother to the grandson covered under the definition of relative for the purposes of section 56(2)(x)?
Proviso to Section 56 (2)(x) of the Income-tax Act, 1961 (Act) specifies that the said clause shall not apply to any sum of money or property received from any relative.
Further, explanation to the said proviso states that the expressions, “relative” shall have the same meanings as respectively assigned in the Explanation to section 56(2)(vii) of the Act.
As per the said explanation under section 56(2)(vii) of the Act, “relative” means any lineal ascendant or descendant of the individual.
Therefore, a gift from one’s grandmother to her grandson should be exempted under section 56 (2)(x) of the Act.
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The question was about a gift from “Maternal Grandmother’ while the answer seems to for Grandmother (Presumably the paternal one). In the light of this, the answer needs reconsideration.
The question says that it is a gift from “Maternal Grandmother’ whereas the answer has considered Grandmother. Maternal grandmother does not fall under the definition of “relative” under section 56(2)(vii) of the Act. In view of it, gift is not exempt
I am fully agree with Satishji and Guptaji. Gifts received from Maternal Grand mother does not cover the definition of relative u/s 56. Hence not exempt.
Advocate Shashi Ashok Bekal, please clarify whether you are agree with our view or not?
The term lineal ascendant or descendant are not defined under the Indian laws. Simply put it means a straight line of relationship either upwards or downwards. For instance, for an individual, his father/mother and grandfather/grandmother would constitute a lineal ascendancy. One prevalent myth is that it only refers to male relations. However, the requirement for an ascendant or descendant is that the relatives should be in a direct straight line.
Reference can also be drawn to commentaries by Taxmann.com “24.2 Money or property received from a relative” wherein it is clarified that a maternal grandmother is a relative and gifts from them would be exempted for the purpose of the Income-tax Act, 1961.
Further, reference can be drawn to the Mullas Hindu Law (21st Edition) page 845, wherein while dealing with the meaning of the term ‘sapinda’ in the context of Hindu Marriage Act, 1955, it is stated that lineal ascendants would include both male and female ascendants of father and mother.
Further, reference can be drawn to the decision of the Hon’ble High Court of Rajasthan in the case of CIT vs. Dhannalal Devilal (1956) 29 ITR 165 (Raj) wherein it was observed that a son will be a lineal descendant of the mother as well as of his grandmother irrespective of whether the mother or the grandmother can form a line of succession under the Hindu law.
BOTH PATERNAL AND MATERNAL ARE COVERED UNDER THE TERM PERMITTED RELATIVES UNDER SUB CLAUSE (v)(vi) &(vii)to sec.56.The last sub clause vii makes clear that spouse i.e. grandfather and his wife i.e. grand mother are covered. therfore , the gift is from a permitted relative.
Gift by maternal grandmother(NANI) to the grandson(NATI) is not covered under the definition of relative for the purposes of section 56(2)(x). As maternal grand father(NANA) is not lineal ascendent of the grandson(NATI), his spouse, i.e. maternal grand mother(NANI) does not stand covered by the definition of relative as per the Explanation appended to Section 56.
Half the so called CAs have opined one way and the other half the other way! The wrong ones need a Refresher course so that they do not mislead their clients!
S Kumar, but the question is who is wrong and who is right is not known.
The term lineal ascendant or descendant are not defined under the Indian laws. Simply put it means a straight line of relationship either upwards or downwards. For instance, for an individual, his father/mother and grandfather/grandmother would constitute a lineal ascendancy. One prevalent myth is that it only refers to male relations. However, the requirement for an ascendant or descendant is that the relatives should be in a direct straight line.
Reference can also be drawn to commentaries by Taxmann.com “24.2 Money or property received from a relative” wherein it is clarified that a maternal grandmother is a relative and gifts from them would be exempted for the purpose of the Income-tax Act, 1961.
Further, reference can be drawn to the Mullas Hindu Law (21st Edition) page 845, wherein while dealing with the meaning of the term ‘sapinda’ in the context of Hindu Marriage Act, 1955, it is stated that lineal ascendants would include both male and female ascendants of father and mother.
Further, reference can be drawn to the decision of the Hon’ble High Court of Rajasthan in the case of CIT vs. Dhannalal Devilal (1956) 29 ITR 165 (Raj) wherein it was observed that a son will be a lineal descendant of the mother as well as of his grandmother irrespective of whether the mother or the grandmother can form a line of succession under the Hindu law.
In today’s time when we have one or two child- it can be a boy or a girl- where is the question that maternal grandmother of grandson is not
lineal descendants.
If any such case is there ,then it’s disparity and need to be fought in the court.