Question And Answer
Subject: Gift of an Oxygen Concentrator by a Foreign Citizen to an Indian Citizen in India- Coverage under Foreign Contribution (Regulation) Act and Income Tax Act
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Querist: Amitabh Singh
Answered by:
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Date: June 23, 2021
Query asked by Amitabh Singh

When the second wave of Covid-19 was at its peak and people were dying merely for the lack of oxygen beds in the country, the DGFT, vide Notification 4/2015-20 amended Para 2.25 of Foreign Trade Policy, 2015-20 allowing duty free imports of Oxygen Concentrators for personal use through post, courier or e-commerce portals in the list of exempted categories, where Customs clearance is sought as ”gifts”, till 31 July

No enabling provisions for relief has been made in any other laws till date. Assuming that an Oxygen Concentrator costs upwards of Rs. 1.5 lakhs, if an Oxygen Concentrator is gifted by a Foreign National to a friend (Indian National, Indian Resident, not being a relative):

(i) Will the said gift be taxable under Section 56 of the Income Tax Act, 1961?

(ii) Attract the compliance provisions of FCRA?

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It is pertinent to note that the term “property” is defined under explanation (d) under proviso to section 56(2)(vii) of the Act for the purpose of application of section 56(2)(x) of the Act. The said definition is an exhaustive definition and does not include “Oxygen Concentrates”. Therefore, section 56 of the Act has no implications on such gifts.

For gifts above Rs. 100,000/- FCRA would be applicable and prior permission would be necessary.

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