Author Topic: Gift under section 56 vs Clubbing u/s 64  (Read 10113 times)

vyakul

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Gift under section 56 vs Clubbing u/s 64
« on: October 11, 2009, 04:56:03 PM »
Sir,

Gifts from husband to wife is exempt u/s 56(2). It includes both cash and kind such as immovable property. Now , When a husband gifts the property to his wife, income tax is not levied in the hands of the receiver for this transaction.
But Section 64, Taxes the income that is derived out of such property as it is without adequate purchase consideration.

Now the question is
1)When a person transfer the property, he also transfers the income from such property, in such cases Can  64 still have any bearing with recent amendment?.
2) Can clubbing provision over rule the benefit of other section?.

sathya

CA_balakrishnan

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Re: Gift under section 56 vs Clubbing u/s 64
« Reply #1 on: October 14, 2009, 02:37:21 PM »
Dear Sir,

I am not clear. It has always been the law (even pre 56(2)) that the income on asset transferred to wife as gift is to be clubbed in the hands of the husband. The gift itself was not taxable.

U/s 56 (2), the existing law as to non-taxability in wife's hands is continued while the clubbing provision also continues. So what is the grievance / point?


Sir,

Gifts from husband to wife is exempt u/s 56(2). It includes both cash and kind such as immovable property. Now , When a husband gifts the property to his wife, income tax is not levied in the hands of the receiver for this transaction.
But Section 64, Taxes the income that is derived out of such property as it is without adequate purchase consideration.

Now the question is
1)When a person transfer the property, he also transfers the income from such property, in such cases Can  64 still have any bearing with recent amendment?.
2) Can clubbing provision over rule the benefit of other section?.

sathya



sai prasad

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Re: Gift under section 56 vs Clubbing u/s 64
« Reply #2 on: January 13, 2010, 08:28:22 AM »
there is no change in aggregation of income u/s.64 nor sec.56 mitigates the sec.64.clubbing of income continues witthout any chanage


Pankaj

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Re: Gift under section 56 vs Clubbing u/s 64
« Reply #3 on: March 26, 2010, 01:03:55 PM »
In case of immovable property Sec 27(1) will be applicable and not 56