Taxation Laws ei w4 a Para ' ‘yy | Particulars Re Section Other Sections discussed TF (22) Deemed Div rdend a ~ oe | Dividend 4 Mi) Exception —— ls | e * ytorest on security when exempted ld 2 inte ) 10(1S) he following two provisions Under this head ot income there are th ) Special provisions (Section 56(2)] > General provisions [Section 56(1)] 9.1 Special provisions [Section 56(2)] The following incomes are taxable under Special provisions: (1) Dividend! in the hands of shareholders other than dividends under section sy (Section 56(2)(/)]; (4) Winnings from lotteries, crossword puzzles, races including horse races, cay games, and other games of any sort or gambling or betting of any form or nay, whatsoever [Section 56(2)(ib)]; Any sum received by the assessee (employer) from his employee under Sc Welfare Scheme provided it is not taxable under head profits or gains of busines or profession [Section 56(2)(ic)]; (11) Interest on securities provided not taxable under head “profits or gains of busites or profession” [Section 56(2)(id)]; ‘») Income from machinery, plant or furniture given on hire provided it is not taxshe under the head “profits or gains of business or profession” [Section 56(2\ii)} (1) Income from letting of plant, machinery, or furniture along with build: provided: © letting of the building is not sep: arable from letting of plant, machine? * furniture; income 1s not taxable under head “ « of business or protest” (Section 56(2)(iii)|; Profits or gains of business or P! 1 For 1S (by the words, figures and letter * ©", the word “dividends” shall by the following proviso shall be inserted, namely: op a of 0 nil rovided ta ‘eduction shall be allowed from the dividend income, erin Sof a : respect of units from weg Hi specified under clause (231) of section 10 0°55 3 demitied company defined in the Explanation to CS section 10, other than deducti oe I, ion On accou; [ st st e y Such deduction shall not exceed twenty per ean ree Pense: and it any Po er cy . ea income, oF IE? ys Fespect of such units, included i Per cent. of the dividend income, OF 1 s, i : Sti iis accion.” in the total Meome for that year, without deduc! wf sat dividends, other than dividends refered © "Sy substituted by the Finance Act, 2020 w.c-l 0!JOP PUOPIAIP [MONON praprre poy, Puspiatd pa PUAPIAIP WAU 911 st Sune) “ MDD) nF 30 sO} POHEAAP PHAPINE ALL SPUMPERI wmzayyr Purpiatp uu HE PBIR!AP PUAPLAID AIL PMSPHAID muygr PMP fo yg 4 LUTTE Tesuagy jenny ou Truuoy v st 3 Paaprarp jo dky, ‘Paiquisip uins jeIo} aq Jo Ino Auedwod v uF ZuIppoysreys s1y 07 uoryods: ME a9plousmeys © q paatooay Jo 0} pred qunowre oy suvoM [eIaUAH UL puaping Puapiayg 71) {Ga(@)9g wonsag Op suonenodau ay (q) Pur Spowaysoy st mms yons (2) Jt vasse yentdeo v Jo saysuen amp Joy suonenogou ASiauatiO Jo JOUVAPE UE se poataso1 KouOW Jo wns AUP |!) {G14\2)9¢ wons98] -yspy uonsas sapun onEstIadwo> 109 poXvlap UO portooar ysaiajut jo Kea Kq auoouy |" [(qna)(@)og wonsag) -jeysq SID UL WUaTTUIDAOD [esta mul SP suosiad Jo sosseja 40 sse[> v wos} Kueduro e Aq |") uonia9g] ‘esse jeydeo yons Jo saystesy ayy ut aNsor 10u Jo 9smo9 oy) uw posueyus Jo uo! suaduu ayn Aq poi ou aq Ai 40 Spuny jence> BP aMUDA U Woy Burxerapun pertdes aanyuoa esq pons St Sones JO SNSS! OHI 49} WoBapIsuoD ay asaya Aydde you |]o4s MH “19A2NOH aumuaa v 40 Kuedusos penn SaIRYS dyL Jo anja jaysoU se} WP lonBsapisuen ayeRoutae ayy SOHES AN MSSt JO} woHBaprsuoD kur “yuapisal tH UL “sdatzoq1 (Kunduos oyeatid) pase” iqnd au YOUN Ul Kundinos y ‘Buiaq you ‘Aurdiwios & ut} Auadosd 10 Kououi z jye ‘puudy fo sop 1] Mt oe (UP WO) “4094 snomaud dub tt ‘saaiazas uossad Aue oud anyea 290 241 spoaoxa tein sommys 30 9 uosiad Kur twos) ‘auad snoiaaud due A1URISGNS Si wo suossad 40 wos {ENIZ9¢ wonsds} .vor ssousng 19 Suit 0 SOK, 40 Aso, pry \« te aan SI (APH A>Hod sou UEWUKD4 W IOpM paren snuiog, Surpnyout SPOS ANC) Wo.d.y wouling the release of th "= company, ms het Pi ort “t itch dtbtion emails he ress bythe company 10 it harsh iilor any part ofthe assets ofthe company ts treated as a divideng. (h) Any aavton of eccumatated profits in the form of debentures. teeny stocks et. [Section 22210 me es fallowing two distnbutions t9 the extent of aecumulated profits Company whetberenpiaizad or nt are treated as dividers, nS 8% 0) Disbtion by a company, of dehentures, debenture stock, og so eps certificate n any fonm with of without interest to its any sharia and oil tu) Disiibution by acorapany of bonus shares to its preference shreholdn, Therelare, the cstribution of bonus shares 0 is equity sharsholders doesn amu oa dcemad dividend (cl) Any disteituion of accumulated profits at the time of liquidation of te company. (Section 2(22Ve)I: any csibution othe extent of accumulated profits of the company whe ‘ptalized cr not ‘on its liquidation is treated as a dividend, However, the following are nt treated as dividends (0) Any distribution of preference shares issued for full cansideration, and (Any distibution 10 the extent of capitalized profit of the company representing bonus shes alltted to equity shareholders afer Mach! 194 il Api 1 1965, (4) Amy dsribuion of accumulated profits on the reduction of its capital. \eeti® oa orofi duction ofits capital \dsiributions tothe extent of accumulated profits oF the company wbetit capitalized or not, to the sharcholder; , fn the reduction of capital is treated ay a dividend. However, the follo¥iMé fare not treated as dividencls: i)” Any dsirbution of preference shares issue for (ull eonsideralion: td (0) Ao distribution to the extent of capitalized profit of the compe ‘epresenting bonus shares alltied to S after March’! Ta net stares lloted to cuty shareholders afer (©) Any distribution ee Of accumulated profits by way of advance or oan. (Sec ment by ay of advance of the company whether eapita {ts 8 dividend (0) to an equity: shacel (holding not less th or kan w the extent of acsulied PES 'zed or not, wo the following persons 15 Holder who & the beneficial owner of the an ten percent of the voting power,) Of Income From Other Sources 357 our to any concer in Which such shareholder i a mer in which he has a substantia terest (holding von power) or tw any person on behalf, or for the individual benefit, of any such shareholder who is the beneficial owner of the shares (holding not less than ten percent of the voting power) wa smber of a partner and legs than 10% voting «iil fiowever. the company under section 2(22Ke) should not be a company gts he public is substantially interested e g. itm bea vate company. charge: Under section 8 fo the pupos of nung dividends in the ttl asi of seve (Shareholde), normal rim and deemed divine ae incomes so ine previous Yeas: Normal dividends 1 deemed income of the Previous Yea in whieh eclured. ie dend the vided of te Prevous Yara ich uh end rmteonditionally made available by the company to its shareholder. ie) Deered Dividend: 1's treated a8 income ofthe Previous Year whieh i 90 distributed or paid idend by Indian or Foreign Company or UTI: y pinidend declared by an Indianforeign company: Dividend declared, diumnbuted, and paid by a domestic eompany on or afer April |, 2020, i taxable inthe hands of sharchollers under section $6(2K2)! (i) Dividend declared by Unit Truse of India: Dividend declared, listnbuted, and pal by UTT is taxable inthe hands of sharebotders Dividend declared und paid out of exempted income: Dividend is chargeable to tax mitts pad out of exempted income, For example, agricultural income is exermpted {03 foreign company declares dividends out of agricultural income in Indie then ‘sen shall be taxable an the hands ofthe sharehokder SL. Only “winning” from the lonery, races, gambling, et. is chargeable ro max Ler section S6(2)i8) amount taxable is “winning” from fotencs, crosswort fet, games card game ee. The ri wow wt, Oky wig fn bers winnings from races, winnings from betling, ete, are chargeable tots, Wa receipt "™t“Winnings”, then itis not taxable under section S4(2Xib) The expression “lovtery” includes winnings from prizes awarded to is by ch vr any scheme oF arranger iisor by chance or in any 0 mner whatsoever, under any sche mer i Monee, cd ga Fane of any sort includes any game Tcronis mode, it which people any person by draw by any name. He “card game and other name. However, “card game 8 22% an entenainment programe on television OF le seme ie. provident fund, 2p ZEAly. the employer establishes 4 sat welfare SST Berita ation fund, any other fund under Employee's St mestic commen © pike hands of . fend under sect” ‘i ‘tax shall be paid by the sy Se eo a under cob jon hes + yl. dstase other fund for the welfare ofthe ern Participates then some annount ws contr exnuntred hy the employee Met employee's) is deposited int the empley Snerctignen analy Sicheon nbs aout is given tothe employee at However, ifthe assessee (emplo ; under Stall Welfare Scheme then he must deposit that amount into the employee tinder this scheme on oF before the due date otherwise it would be taxable in the emp seas nt auable under section S62) that if should not be sins of business or profession. 9.1. Interest on se uation Laws Ts ty, lovee Uniler such « welfare sctieme if theo outed annwally by him and the same Pee Fhe anal annual contribution (employer's qi 4 ;ee’s account under such scheme, on whirl ‘made every year and ultimate) te time of retirement, 1) has received a COntTiDution fFoen hig thea moj the ans con taxable under hea a inser under section S6(2). Further, an important condition for such ities Dictionary meaning of security is “s document held by a creditor ay guarantes of, 9 payment”. Therefore, where seme document is given by the debior for tines ean ay guaran or payment thn sch document(s KROW a eeuny. Sane thes i cece Lona, Grterture a bonds ee seed loans an seeurica Theage any interest received on such Debentures and bor fer section $6.2). However, equity shares are not secured loans so any income fom sh Is is imterest om security and tanable cquity shares isnot interest on a secunty and hence not taxable under seetion 56/2) Interest on security (Section 2(28)|: Further, interest and securities under secon 2128) mean: (2) Interest on any secunity of Central Goverament o State Governmert: (4). Inierest on debentures or other securities issued by or on behalf of local authors ‘ora company or a corporation established under statutory provisions For interest on securities to be taxable under section $6(2), it should not be exemped 1 Interest on security when exempted (Section 10(15)]+ Interest on following scouts = 0) cxempted under section 10(1S) Tmmerest on nated Secutes, bonds, annuity erfcates, savings certifies: Imerest on Nofed Capital nvesrent Bonds nthe tas oF dividual oc HUF tmterest on Nottie eit Bond inthe ands of dividual or HUF Insert tecived by. ‘spon redant Indian rom noid bonds: oF 2 individual es nomince oe survivor of sich non reiden- adi ot * an mdividual to whom bonds are gified by such non-resident-Indian; Hower following canditons must be flied by NI: (0) bonds are purchased by a non-resident Indian in foreign exchans art ses and principal recived inespectof such bonds whether nthe Gt otherwise snot allowable to be aken out of Ina, sent an individual, who 16 4 pon-tesident Indian in any Previous Veur in WAAR herds ar acqurcd becomes a reidet im Inia nat suRSED 2%, Provisions ofthis sub-clause shall continue wo apply in relation 0 sch ind where the bunds ae encased pri to thew matty then infec ft P Year mill bearable Increstpayabie to any foreign bask sith the approval of Ri interest payable sh side tet Pestonng central banking functions ou by following government and financial institutions iy Garemmen or lal any nae homed ee Han ‘outside India. " aa he . sat io ’ cae vcapeharne Whe books of Une maint on ae ate 28 seisand " ss om le Income From Other Sources 359 ‘cash basis", then the are not maintained oF Werest on securities 1s ‘receipt buss” If, howe ‘able ow # "recciph however, books of a cerual” basts, nan” seme from ener PM Frnt leon hire Section S62 from machinery, plant, or Furniture, belonging wo the asessee and let on his ireame from ollie? Sources ifthe sie isnot shargsable to ax under the «af business oF profession ovo 7 eal te: Mr. A has suspended his business, Now he has given plant, machinery, and nt, Here ret i txable under the business head wre fe ir. A has discontinued his business, Now he has given plant, machinery «By am industrial undertaking on meney orm Felore June |. 2001 tom an approved foreign insti 4 Byeany specified institutions suchas (FC, he Industral De topment Han of Ia UDAD, Exporelmport Bank, Natonal Housing Rank, he Indus Cred nd Savestinent Conporation of India (ICICI ate the Sal Ingres Development Bank tind (SIDBN on money borrowed before June | 2001 om oats Ind vo the extent oF approved rite : By any financial o: barking instution on money bones! tnatside India to the extent oF appenved rae fer spesifc pupOse ees 2 the purpose of avanengInans to indus underahins aay fo purchase of rom motels capil psa acer ot Ii = for the purpose of smporing any goods which the Ce Considenecessry impor ine UME ERS. ¢ By an industrial undenaking in Inia on any memes Porewel tS 1 HSE currency from sourees outside India w the estat appresol ie ander sr * By a sched bank before A |W sr an ie aE eet a a or dees mene we sth dont byte bak approve RES mn Bye pbc company ed ant epee nh ee ‘on the business of providing Toag term fnanse trie Torresen pe vepnnson ster * By any public secur company in rapst of AP REET pon os Stents such conditions, inctading the ne ¢ Central Government registers his name and the holang with MA 8° eae tama risa 8 Hy Government om deposits mate EY the emp fy BE 08 fe scheme wut of 0H “we June 1, 2001 fom ceil or sae gOVeTMIMEE OF PSC im acconlance sath ee | — (6) mere on rat toe bonds wows undet OM DET ay Vins Bhopal (terete eo yee COMBS Ds Bel ch fi ot we wt Goverment FOE ths Interest ony pest fs the Denefit ot count witt REL, a pbs Sextor COME in, DatPose ristest on bas sued 9 “Sta Poi Fiiee 9” sai low aboot °Taxation Laws san ha, income From Other Sources ‘ ’ es KIP onthe li O frag, | Oye a akes KIP on he ie i oa sep SU tt fe lening of building, machinery, play Ys “ Lf. Income from ihe compesit [Section 56(2.iH)) Ian assessee fetuing of the build fiom such letting is taxable is thatthe seme income must not of his friend B an inher hanes under Section fare any machinery, plan, oF Future and also yyy, is inscpatabe fom fting oF machinery. plant or fuming “Eaad | Bp) as income romother sources: However, an importante Mm | St be chargeable to (ax under the he st are prominin im excess of fir marke value Seton $62} pve COMPANY FeCeI¥E> cOnsietiion forte none re aresident person and the consideration rece juc of such shares ie. shares are isu received for such shares as exceets the ad “Profits eng ing ‘of shares (preference o 0) ved for the isue of shares exceeds ve at a premium thea aggregate ‘market value of the shares shall be business oF profession” inl i Important Points sp ae vl Important Points: gee 2 itereis ting of machinery, plan and faritare and also letting ofthebiyy | st andthe etings formar and parcel the same arsaetion othe rwaige de separable (i the sense tat ating of one not acceptable the ge siut ting othe other, frist, eng of inemshowsealong yi = funiture) then such income is taxable under section $6(2) (i) under aca peor fom other sources” (i 8 not taxable under section 28) Thy s applicable even ifthe sum receivable forthe two lettings is fixed separ, jin bya company froma class or classes of persons as may he notified by the Cental Ifa huilng is let out and other asses ihe machinery, plan, or fart se Government in this behalf en on rent, But, if eertain amenities hike life services, ait-conditionng, 2 Following clauses (aa) and (ab) shall be inserted after clause (a) hung focilities, etc. are provided then Section S6(2\) is not appicabis ‘of Explanation to clause (vib) of sub-section (2) af seetian $6 by Act No. 23 «sential requirement of Setion S6(2Mii/) is that there should belting ot pn, of 2019, wef. 1-4-2020: machinery, oF fumiture and also letting of buildings. (aa) “specified fund” means a fund established o¢ incorporated in India in the Example: Mr. A has discontinued bis business. Now he has given plant, mactisen, form of a trust or a company ora limited fbi partnership or a body and furmiture on rent, Hlere sent is taxable under section 56(2)(i) comporate that has been granted a certificate of registration as a Category 1 For insanee, if the ownes ofa building only undertskes to install andl operate a cor a Category I Alternative Investment Fund and is regulated under the le when shares {Sittin 1 Shares are ise at pa Seton 2X02) AIS “Ste ata premium. Therefore, nothing ‘stable under seen 5 Profession”) then lump sum section 5612) oo 7 se 142028ES 302 Taxation Laws Income From Other Sources . Mr. A hats acquired @ house an MSC and the cox of greement t0 sell the ho nt of acquisition is 830 Lac. He to an agreement USE Property 16 Mir ; me reason de © Mr 8 and took advance maney ot .- Due to some reason deal could no, © materialized ieee id y of ‘a Subsequently it Was sold by Mr. 1y pg and this amount 1s forfeited H.C for HA of M.A under Section Syn) 6 FRM Lae 810, Lac wll be ‘ie op? In Situation 2: Shares are issued at discount. Section S6(2\ vib) jg Yoo co shares are wssued ala premium, Therefore, nothing is taxable under section Seay sation 3: Shares are issued at a premium. The total consideration py, consideration rceived therefore nothing taxable under section S62, jp)" "3 Tn Situation 4: The total consideration per share is € 50 and FMV as dete, S042) viib) is 8 42. As consideration received is more than the FMV therefore, per share} is taxable under section $6(2\ vib) provided the following to o satisfied 363 Mate it io gay sum of money received during the Any Previous Year without consideration 118 OVEN) onsiderar Beet here the following conditions must he i Asvessee (Recipient) may be any person, uy leriust have received the following from excan le lle (i) Lud, ts. private company during the Previous Year 2021-29 i paren cea (a) any sum of money, without consideratin, exceeds fifly thousand rupees; (1) Shurcholders are resident in India during Previous Year 2021-22 9.14, Interest received on delayed compensation oF enhanced compensation a deemed tobe the income of the Year in which it is received [Section S6(2\ i fogt S7Ui)eand Section 14S.) Ue existing rovsans ofthe Ione Act provide that income char the head "profits and gains of business or profession” or “income from other source” og be computed nseondance whether ash or metcanilesstem of aroun employed by the assessee. Further, the Hon'ble Supreme Cour, in the ease of Runes, C1 has held that arrears of interest computed on delayed or enhanced compensaten si be taxable on an accrual basis. This as caused undue hardship ta taxpayers With a view of mitigating the kardship, the following changes undue hardship payers. the apereyate value af which 40) any immovable property received: (i) without consi Tauon, the stamp daty value of which exceeds finty thousand rupees the tarip duty value of such propeny. Gi) for oF a consideration, the stamp duay valu uf such property as exceeds such conxideration. if the amount of such excess is more than the higher ofthe following amounts (a) the amount of fifty thousand rupees; and (b) the amount equal to 10%5* of the consideration * 10% is increased to 20% if the buyer bas purchased the residential unit during 12,1.1,2020 to 306.2021 and such purchase is by way of first ‘ime allotment by realestate developer builder and purchase pice docs not exceed 22,00,00.2000, However, where the date of the agreement fixing the amount of consideration for the wansfer of immovable property and the date of registration are not the same, the stamp ty value n the date of the ‘agreement may be taken for this purpose F se where the amount of Further, the said provise shall apply only sma case where the a Consideration refered to teri, opr there as Been pod by ary ‘mode other than cash of through such other clectromic mode my . prescribed on or before the date of the agreement forthe transfer of suc Immovable property; (6) any property, other than immovale prone ser idee © without ‘consideration, the aggrezate fat market va ate * filly thousand rupees mila i © fora consideration that is less than the aggregate fair market value of the rae amoan iced iy Hoss Ses 20) 7during 2 Financial Year: ist © Whmust be received on or after ApH I me (1) Section 145.476) inserted: The Act has amended Section 1454 19 provide ta’ ierest received by an assessee on compensation or enhanced compensatinstl bbe deemed to be his income for the year in which it is received, irespestve oe ‘method of accounting followed by the assessce 2) Interest on compensation on source enhanced compensation to be taxed underae ection 56(2) vill) has been inserted to provide that income by ¥9 interest received on compensation or on enhanced compensation refers! * Section 145.A(b) shall be assessed as “income from other sources” in the yis® which itis received. “ 40% deduetion (o be allowed from such interest: Clause (jv) hss been m= into section $7 to provide that in the case of income of the nature referred” * section S6(2)(tH}, a deduction of a sum equal to 50% of such income allowed and no deduction shall be allowed under any other clause of this 214 Forfeiture of Advance money received under the agreement to sell «capi #4 any sum of mone: for the transfer of ea . nega > received as an advanee or otherwise in the course of M8 pital asset, if (2) such sum is forfeited: and (by the negotiations dono id 62K, ions do not result in the transfer of such capital ase f 11990) 181 ITR 490 ¢8¢)Taxation Laws 304 Chany then following sballeaxable; See S«Situation Amount caxable | Forte cig tion | 750.000 rT Single trang ® Youd be eye $62) (a) any sum of money, without] the consideration, the aggregate |aggregate value of value of which exceeds fifty thousand rupees {h) any immovable property such asland orbuilding or both (i) without consideration, the stamp duty valve of which The siamp duty value exceeds fifty thousand of suck property rupees, (i) fora consideration which 4x less than the Stamp] the stamp duty value of| Duy Value of the|suck property as Property by an amount exceeds such excveding fifty thousand consideration (treated | rupees a: gif proportionately) immovable property such as shates and securities; fridge, TV, car, mobile, AC, computer, jewellery, archacological collections; drawings, paintings; _| [CO any. property, other than | sculptures; orany work of art 4) without consideration, the aggregate fair market |(j) valve of which exceeds Fifty thousand rupees, | (i) fora consideration which | | s less than the aggregate fair market value of the| | | Property by an amount| “!) exceeding fifty thousand rupees, __Proportionately) OF all trensaen of the Preview Ks Yea, the Previous a whole of the All tans Single transactien Single transacien the whole of the |All transactions aggregate fir market value of ‘such property; the aggregate fair | All transactions market value of] such property as exceeds such ‘consideration(trea ted as gift | Med purchases | 365 ‘Sinwation receives a cash gift of & Noiking | vo jn October 1, 2021, from his 4 — Tax fabiliy te 'y axable in the hands of Mr. A as } amourtis within the emitted Limit. a fie pcceives @ Cash gift Of the 5.000 i taxable in hands of Mi. X Nar 21-22 | 170,000 from his friend B, ‘pan from his friend C 10,000 from his friend Dy | Pso0 from his friend Ey | Fg received the following howe | lt We casa Of WanomlE prope properties fiom his friend Mr. X | separate ganvction ws considered Ciekeut any consideration during therefore the amount taxable nthe hand of Previous Year 2021-22 Midis | (@) 1 Kanal house in|) |(a) As the siamp duty value excecds | | Chandigarh — where ||| 750,000 therefore the stamp duty | stamp duty vaiue is @ 5 value of 5 Lac is tacable in the || |) hands of Mr. 4 || pene a am heal wee | @) House in Himachal || \(8) As stamp duty value exceeds | Prades where stamp ||| % $0,060, therefore, House in | | duty value is P4 lacs ||| Himachal Pradesh is covered under [)) anew elawe ie. Section $6(2K01) | || and hence 2 4 lacs taxable in the || |) hands of MA | [10 aricudaral land where |,((0) As stamp duty value exceeds | | stamp duty vaiue ss 22 50,000, therefore, agriculture lard || lacs |) in Haryana is covered under ne | V1 clause ie. Section 50.2904) ara || hence #2 lacs taxable in the hands | ptr | ‘The total amount taxable in the hands of Mr. A under this Clause is 11 Lec. oe as in the case of immovable property gee considered lac | sr gent sabe the han Mr Ais | wy fa) Asn ths case 10) pot af hand in Himachal | (2 camp ds Pradesh during the Previous luring value and consideration is @ Fear 2021-22 for ®5 lacs where we ad amp duty value is 75.5 00 as Therefore, nothing is taxable in the hands of MAravation Laws 360 Tae Chaps Situation : Tax fabitiy ~~ “py a plot of land in Pancha | (b) si his case —] “ime the Provo Year 2021-/—@diference Beoseor stamp | RE yo acs where stamp difrence o values 2105 . | 10% of 10 lacs 1,00,099 Therefore, nothing is 1 the hands of Mr. 4, tin sa plovofland in Mal dering |) Asn thiscase the Prosious Year 021-22jor®)—@ Thedifforence between stam 75 lacs where stamp duty value | value andi consideration fy wtlélee + W%of 15 tac 150000 | | ites | of Mr. A. | 5 During the Previous Year 2021-22 Mr. A receives the gif of (a) jewellery whore fair market value is €2.5 (5) paiming where fair market value i & 50,000 where fair market value is | wo 5 As in the case of moveable proper,” | aggregate amount is taken, ihre fair market value ofthe gift is 83 Lac vhs exceeds 730,009 therefore, the shun amount is taxabte | Mr A purchaved: (a) jewellery for @ lacs where fair market value is 23.5 (6) painting for ¥ 20 lacs where fair marker value is @20.5 lac Importent Points: Exceptions: in the following exceptional cascs anything reccived will not be taxable in the hands of the receiver: 1. Gift of money or moveable propery or immovable property without consideration * with inadequate consideration fem While calculating the exemption limit of % $0,000 under section 56(2KW. sit ‘poney of immovable property without consideration or of movable property Mt ‘ithout consideration in the following shall not be taken into account: (2) received fom relative Here are relative means: (©) nthe case ofan individu: (A) spouse ofthe individual; (1) brother ot sister of the individual; (©) brother or sister ofthe spouse ofthe individual; (D) brother or sister of citer of the parents of the individual; 4B) any lineal ascendant or descendant of the individual; ‘aggregate amount of consideration is tales which is &25 Lac whereas the fair markt value is €26Lac, therefore, difference ie. 1 Lac is taxable in hands of Mr. A | /. icone From Other Sources a8? (F) any lineal ascendant or descendant ofthe spouse ofthe individual; (G) spouse of the person referred to in items (B) 10 (F): and we of a Hindu undivided family, any member thereot ui inthe " eived om the occasion of the marriage of the individual 0 eyed By way oF wil Or nheritane, co 2 ed in contemplation of death of the payer a “aed from a local authority te eeived from any und, Foundation, university or other eduationa institution, Uh ermal or any other medical insititon, er any tt or istition mentioned ier section 10(23C). | eeved fom a charitable insiutionrepisered unde sect [2A or 12AB 1 om an individual BY 8st sreaed or estaba soley fr he benefit af ‘ reluive of the individual seceived by an individual, from any person. respect of any expenditure actualy Jrcurred by hhim on kis medical treatment or treatment of ary member of his jam, for any iiness related 19 COVID-19 subject to sack condition, as he ‘Central Government may, by notification in the Official Gacese, specify in this behalf ). by amember of the family of « deceased person (a) from the employer of the deceased person’ or (2) from any other person or persons to the exten! that such sum or aggregate of such sums does not exceed ten lakh rupees, were the cause of death of such person is an illness related to COKID-19 and the payment is (i) received within nvelve months from the date of death of such person: and fit) subject to such other conditions, as te Central Government may. by notification in the Official Gazete, specif ths tea i, Explanation.—For the purposes of clauses (XT) and (XID) of ths proviso, Yamin etsnon toon edd sal ave he same mooning a assed 2 Gifs by way of transaction on or afler 01.04.2017 Following transactions are not regarded as tranyjers weer Sec ce By way of distribution atthe time of complete oF pata patbon of HUF [Secston 4] or ‘Under scheme of amalgamation demergs Under the scheme of amalgantation de $ (via, (vie} or snes (Section 47 (01) oF Under the seheme of amalgamation of bankins compe (ia) or Business re-organisation of e0-operstne Any transaction under Section #7086) 07 (8 * eh Sr Staiger ion 47 or [Section 47). (NibI] oF merger of foreign companies (Section park [Section 47(V16a) | au) or (sige) 0” (vitap uw308 Taxation Lany ove entities assessee can receive above enti A Therefor, rom the i MP with of without consideration (even execeding without consideration oo! without paying tas under seetton $6{21(X). you treveive by any person taxable: Gilt received by individual g 0 ‘oncluding an individual) on or after 01,04,2017 is taxable, YP a Tog, 2 Value when the date of agreement fixing the amount of considera iranter of mmmovale property and the date of registration are rao ‘here the dive of agreement fixing the amount of consideration of mmovabe prop and the date of regbtation ate nol the same asic on fe ete of sgrsment may Behe fre pu Clause However, it shall apply ony in a case where the amount of canes refered to thei, oF a part thereof has been paid by way of an gana cheque or an account payee bank draft or by use of an clectronic eleant P trough a hank ccount on or before te die of agreement fer te meee immovable property tthe wt for the tan + Gifs taxable whether the receiver is resident or nonresident in Indl «sceptial cuses gifts are taxable whether the recipient is resident on in India Gung tha previous year. Fre a ones: + Gift cacable where made ontside India by a resident person to Non-resident: wll be charged under section S6@)(x) even i the gi is made ouside Iain te resident person to Non-resident person © Gills received on birthday not exempted: Gifts on occasion of marae ‘whereas gifts on other occasions such as birthday are not exempted. Meaning of various terms “Fair market value” of a property, other than immovable cas the 4 immovable property, means the sale determined in accordance with the method as may be prescribed; (6) “jewellery” shall have the meaning assigned to it in the Fxplantion & Section 214i (d) “Property” means: (9) Immovable property being land or building or both; (ii) Monable Property: it means shares and sccurities: fridge, TV, car, woDle C. computer, jewellery; archaeological collections; drawings; paintings \ : sculptures; or any work of art; bullion, etc Je) “relstive” shall have the meaning assigned t sine ining assigned to it in the Explanation to cat ‘of sub-section (2) of this Section; is ” (A “Stamp dary vate” ny le” micas the value adopted oF assessed or asesable by authority of the ° sto Fatale Cental Government or a State Government for #1 PUES Stamp duty in respect of the immovable property; 122 Example I: Mr. receives the f “ without adequate conan keene? HS following amount during the Previous Yea 202 (40 from his friend Mr. B £25,000 from his friend Mr, C jom: Aporevate amo Bereuate amount received is 8 $0,000. Therefore, exempted 9 a cP” er gif oFmone, |S Yost lea Kiobe 200 il 31 032017 is taxable, Whereas a Gif received ty UF Fy in, 5 isi! tot Income From Other Sources Je 2s Mr A receives the follow sare ate consideration 000 from his friend Mr. 5,001 from his friend Mr. C 369 ing amount during the Previous Year 2021 Gounions AgeFeRAKe amount received is € 59,09 1. Therefore, the whole amount is texable under Section S6(2) Theretore, the whole am rs Me A asi the following amount during the Previous Year 2021-22 £25,000 fiom his friend Mr. B 25,000 from his friend Mr. C 1.2000 from his friend D Ssotuion: Aggregate amount received i & 52.000 Therefore the whole amount 1520010) is taxable under section 5642) ‘Example 4: Mr. A receives the following amount during the Previous Year 2 without adequate consideration: fe £5,00,000 from his grandfather. £25,000 from the cousin of the father, 4 £26,000 from the elder brother of his grandmother. Solution: Aggregate taxable amount received is® 5.51 Lac out of which i). 851,000 (& 25,000 fiom the cousin of father + % 26,000 from the elder brother of his grandmother as both are not relative) is received fiom a person other than a relative lu) 5 lac received from the grandiather who is @ relative and any amount received by the assessee from him is exempted £51,000) is taxable under section $6(2), ear 2021-22 Therefore, the whole amount ( Example $: Mr. A receives the following amount curing the Previous ¥ Without adequate consideration: + € 80,000 from his friend Mr. B om the occasion of hy mar + $1,00,000 under will * £20,000 from a local authority * £75,000 from a Hospital university * 225,000 from a charitable institution registered uni 2 3,0, but from exer. rr daring the Previous Year 2021 er section ZAM, te eniies covered under Solution: Aggrepate ammount received s exception therefore the whole amount i Example 6: A HUF receives the following “out adequate consideration $25,000 from Me. B (a family ao © 225,000 from Mr. C (a family [ent ai soo. Therefor Solution: Aggregate amount recived is € 500% . exempiedFaation Laws x0 i rourt during the Pre Chap, Example 7: \ HUF receives the following ame the Previous Year 259) 225,000 from Mr B (a farnly friend) 2 E25 001 from Me Ca a re anwuat recesed is € $0,001, TherefOre, the whole g Solution: Aggreea (450,001) 1s taxable uncer section $62) Eeample & HUE reese the llowing amount Juring the Previous Yea 269) without adequate consideration: » ‘© 225,000 from Mr. B (a family friend) ‘© 225,000 from Mr. C (a family friend) ‘© £2000 from Mr. D (a family fiend) Soluion: Aggregate amount received is €52,000, Therefore, ($2,000) is taxable under section 56(2) ‘Example 9: A HUF receives the following amount during the Previous Year 2021.35 vwnthout adequate consideration: és # £5,00,000 from Me. B (a family member) 225,000 ftom Mr. C (a family friend) = £26,000 from Mr. D (a family friend) Solusion: Aggregate taxable amount received is 25.51 Lac out of which: ())©51,000 is received froma person other than a relative; (1) & Sac received from a relative and any amount received by the assessee fromhin is exempted. Therefore. the whole amount (¥51,000) is taxable under section 56(2), Example 10: A received the following amount during the Previous Year 2021-22 in respect of any expenditure actually incurred by him on his medical treatment or treataert of any member of his family, for any illness relsted to COVID-19 subject to suct conditions as the Central Government may, by notification in the Official Gazette, spe seuih a 1, by notification in the Official Gazette, speci = 260.000 from B = 250.000 from Solution: Aggregate taxable amount re actually incurred by him on his medi and hence exempted Example 11:4 died due to COVID the family of a deceased person "oun, the whole anoue ceived is 71.1 Lac in respect of any expendi? ical treatment or treatment of any member of his aru and the following amount is received by a member's e ¥ te fo teenpyr Of the deceased person: or The payment is ( recetved within twelve in the Official Cae en 45 the Central Government may, by notifies?” cues “ specify in this behalf. gercgate wxable mount rece ld ‘0 the whole amount is exempted. int received ig 3 Lac and all conditions ae fll From Other Smuces an 11; A died due 0 COVID and the following amount is received hy a member of jag deceased person ail sve 1 tac from the emploner ofthe deceased person ap e gy Lac from friends pment ane ive within twelve months rom the date of death of ach persn: aad ‘) 5 suaject 10 suc ther conditions, asthe Cental Government may, by rotfcation ‘a the Official Gazette, specify in this behalf «gs Aparegale taxable amount reccived is 812 Lac which exceeds 10 lac so 10) ac is sao rae ll be taxable as a gif which exceeds 10 fae so 10 peo 9.2 General Provisions [Section $6(1)] = Any income ‘which is neither exempted under sections 10-13; «nor taxable: (e) under other four heads of income 12, “Salary". “Income fiom house property”, “Profits or anins of business or profession” and “Caputal gain”; or (b) under section 56(2). = is taxable under section S6(1). In other words, section 56(1) is the residuary section because income which is not taxable under any provision is taxable under this section, Therefore, for an income to be taxable under section $6(1) following conditions must be futile: (must be an income; (ii) It should not be exempted under sections 10-134; (iid) Vtshould not be taxable under the other four heads of income as well as under section 56(2). Examples: ‘+ Agricultural income from outside India + Interest on securities issued by a foreign government * Salary payable to a Member of Parliament ; +Family pension received by family members ofa Seated employee. he ime of eeirement tthe extent of terest om hag aan S nized provident Fund «employee's contribution towards unrecet Income from sub-leting, Interest on bank deposits ane loans Director's fee sarang tothe basket Director's commission for ating a8 2487 Rent of vacant plot of lan Ground rent, ete co a person oer than his employer ce received by arent Examination fees anIncome From Other Tiacation Laws Sources 5 Chap 9 etion regarding Cost of Repairs and de ow? epreciation in case of letting out 0 ae Pa ier rmiure, and Building Section Say” "of ttn mt af Oe this Section following expenses are decustible ant repairs in respect ofthe building ¢ Mining rent and royals + Casual income fora will, contract, or trust deed (excludin 4 Annuity payable und Nye his chargeable under the head "salaries" by the employer whic courte fngurance premium revarding insurance sgoint damage building epreciation on building. Curent repairs in tespect of plant, machinery, and furniture Insurance prem fegarding imsranceaguinst damage or destruction of plan machinery, and furniture 1 annuity "Y Paty Income from undisclosed sources: oo destruction of the 4 Income fom racing establishments: The compensation received for use of business assets, An-annuity is payable to the lender of a trademark, ‘© Trvome from the activity of owning and maintain 9.3 Deductions [Section $7] While computing the income under the head “income fom other sourseys {ollowing deductions are allowed YATES the 9.3.0, Deduction regarding Reasonable Commission or remuneration dividend or inerest on securities Section 57(i)| Any reasonable sum pai y the assessee as commission or remuneration tothe or any other person for realizing his dividend! or interest on securities is deduct 9.:h, Deduction regarding employee's contribution towards Staff Wel (Section $74) ie! horses for the rage «Depreciation on plant, machinery, and funicute sd Sundar deduction i case offaily pension [Section 57a) + here farmly pension is received by the asesse (family member of a deseassd cophyse) than the arcunt of deduction he est of he lowing 215,000: oF 4384 % of such amount received de Deduction regarding Any other expenditure for earning income (Section $74] ‘ay other expenditure incurred for earning any income i allowed as deduction sre the following conditions are fulfilled (i) The expenditure must be wholly and exclusively for the purpose of earning incom {iy tems be revenue expenditure and should not be capital expenditure (ii) ermst not be the personal expenditure ofthe assessee (0), Ie must have been incurred in the current Previous Year and aot in an earlier or subsequent previous year. Example: Where the assessee has borrowed a loan for investing in shares. or ‘etenures for earning income then any interest paid or payable on such Toan shall be come and such interest is tagenditure wholly and exclusively forthe purpose of earning income re alowed asa deduetion even if no income i received durin the curent Previous Year from Such shares and debentures (CIT y Rajinder Prasad Moods’) 435 Deduction regarding interest on compensation or enhanced -_ ‘Where the assessee receives income by way of interest on compensation Of 1 EE Compensation mentioned in Section $6(2Kv*i), them 9 sedation of aie al Betcent of such income shall be allowed. However, regarding such inter ‘Si be allowed under any other clause of this Sesion JO reching It the assessee (employer) has received @ contribution from his employee under Welle Sceme then he mus deposit tha amount int the employee'caccounonces a scheme on or before the dus date otherwise it would be taxable inthe hands oFan empleye Under section 56(2). Therefore, ifthe amount contributed by the employec is deposited y ‘the assewsee (employer) on or before the due date then itis allowed as a deduction Dues here means the de fxed under the provisions oF lw or terms of contactr Service of otherwise on or before which contribution made by the employee rust be cdsposited into the employee's account in the relevant fund. ay ie ample: Mr an cimployee has panicipated in Stal Welfare Scheme estabishé saa Ret x & Co, duc date fixed is October 15, every year. During Previous Yu ie ay A Co. deducted 75,000 from the salary of Mr. A but did not deposit it irtobs (Mr. A) account on or before October 15, 2% is before Octot 5, 2021. There! 5, is income of X & Co. under section $6) 2\(ic}, {Tiere 75 660 i ‘ ‘compensation: However, im case X & Co. dk 7: . Hosen X & Co. deposits 2 73000 into the account of Mr. A on or befor Ovtober 15,2621, then X & Co, ean claim deduction under section 57{ia). 1 Forthe words “dividends, ot ° OLD wef eae OMe han dividends refered ton section 115.0," by he ANE Following provise: shall he insertec PNP hl eer inane Finance dt 2020 nef 122! - i be allo For th 2 ines wns a Mutual Fd fom the dividend income ar iene #8 from a specified congas hte under classe 23D) of section 10 or ncome mn epost oF duction on account or ctited in the Explanation 10 clause (35) of section 10, other Cunt of ines expense, and in any ction ced tnty per cent of he dna nso, or 9 ee Sack Senet . ‘come for thal year, without dd ae (1978) 115 TR 519 (SC) ome. oF income in respect of such unis luction under this section378 Taxation Laws 9.4 Disallowed deductions [Section $8] Personal Amount under section JOA {section $812)] outside India [section S81 Kani} Ary capeiare in respect ot ovaty and Techical fs eceved foreign companies under se 44D {section $80)1 The following are not allowed as deductions while computin head “income from other sources”. 9.4.0 Personal expenditure |Section S8(1)(ay()) Any personal espendtureincured by the asessee isnot cligible For deduction ue section § ig the income uncer he 9.4.b, Any interest payable outside India (Section 58(1)(a)(if)| ‘Any interest payable outside India if tax is nether paid nor deducted at scure isms eligible for deduction under section 57 * sees 9.d.c. Salary [Section $81} a) Any payment under the head “Salary” is payable outside India if tax is not “ lary” is payable outside India if tax is not pido ‘deducted at source and is not eligible for deduction under section 57 94d. Wealth-tax |Section 58(1)} Any amount paid a ‘ ‘wealth-tax is not eligible for deduction under section 57. -4.€. Amount under section 40 |Section $8(2)] w : payee i asesce bis taken goods oF services or failities from his relative a in respect of expenditure is excessive or unreasonable considering the Fat Market Value of such go nee 1h goods or services then an excessive amount is not allowed * Example 1: Mr, cf Aare 1 MEA purchases oods from his brother @ € 1500/Ke wher Ff wee 800ds s 1 400K, Therefore an excessive rate of €100/KE 8! wed as a dedetion, Example 2: SM. has inthe markt such telat or expenc deduction ‘mployed his relative with a monthly salary & 15,000 vere “Thcefers tel 94 get more than & 5,000 according to his quaifeoh * AME excessive salary of & 10,000/month will be disallowed Pet Any expenditure i vi Any on neallage LLTSPeCt Of winning from foceries, er. {Section S80) ames. and other games ofa Htiny fom loteries, erossword puzzles HE Aeductible under sectgn $02 “OT Of Rambling or beting of any farm or nature * Income From Other Sources Section S8(4) is not applicable wo any expenditure on the activity of owning ' considered as a loss from the activity Mowed asa deduction, vi Horse Face MeANS & FACE UPON Which wagering or betting can lawfully be made ed Income Chargeable to Tax (Section 59} “where an allowance oF deduction has been made inthe assessment for any year tander the head “Income from other sources" in respect of expenditure ane py the assessee; and _- subsequently, during current Previous Year he has obtained, whether in cash or in ry other manner, ny aMoUNt of remission of any such ait ‘then the amount obtained or the value of the benefit, shall be deemed to be the income under the head "Income from ather sources" ofthe Previous Year in which the amount is received 375 55 ee hories Le. Ping TACE HOSES 4 Such expenditures ge aman Rose for rae andi fo sit evtion 59 is similar to section 41(1) ofthe business income 9 Conctusion tncome under head other sources includes two types of income: Special income and cqreral income. Special income under Section 56(2) includes dividend, anterest on Keurties, gifts, lump sum amounts including bonus, etc. General income includes any vane neither excepted under Sections 10-13A nor taxable under the frst four heads of Seen $6(2), which means any taxable income which is not covered anywhere s covered gader general income under section 56(1). Therefore, Section 56(1) i a residuary section father the head of other sourees is the residuary head, Here, General icome means income ‘eceived of receivable-Deduetions. Significantly, deductions are mentioned uncer section 5. 9.6 Points to Remember 1. Under this head of income there ate the following two provisions (a), Special provisions [Seetion 56(2)] (©) General provisions [Section 56(1) 4 2. Special provisions: incomes ae taxable under Special prov ne Divide ‘Winnings from lotteries, crossword puzzles races including horse races S03 10) from his employes under Staff Welfare received by the assesses (emplone) A egble unde the head “pefits or Scher Interest on secures provided mx uble wnt Ws NTE tains fb neS 0 ICES, IE ee ein nen, come fro ting ofl hi a TP ny sar icing bons ei NE 2 EAS nce ‘otherwise in the course of negousbons sum is forfeited, ee sin 3. General provisions: Any income SH ncome or Sevt0" S02) i taxable 134 nor taxable under the ater 60! under general provisions gable Commision oe femueraton Deductions: Dedstion fgets TTT.” employee's cormbution wowardy reaiing viendo mest 67 SMEG gon in cae of etn oof Staff Welfare Scheme, Castel STU ET sudan duction ess of fly plant, machinery, farnture, and DAIS or exempted under seetions 10Taxation Lanes Chapg persion, Any other expenditure for eaming, ImeFe OM compensa «enhanced compensation ; Disallowed deductions [Section $8]: The following are not sup, deductons while computing the income under the head “income. god a Sources Personal expenditure, Any interest payable outside Inia Sqig 0" ter sutside Incia if tax ss not paid or deducted at source is not eligible tinder section $7. Wealth-tax and Amount under section 404, le edutes QUESTIONS White a comprehensive note on Income from Other Sources. Why Head Other sources is known as the residuary Section? Exy other sources. Write shor notes on: (2) Special income under head Income from Other sources (b) Deduction under head Income from Other sources, © lain income from ft received or receivable in the previous year Chapter 10 CLUBBING OF INCOME SECTIONS 60-65 SECTION-WISE STUDY (cseion_[ Para [Page | aan fincome without tating an se 102 je ~ | Revocable transfer of asset Particulars [Reve Sa) Income oF remuneration arising wo spouse ftom | 104 | concer _ _ lecigoy | incorue from ie Kevelansiined we spouse — [105 Income from the Asse transfered to sons wife 106 Income from the Asset transferred to a person oF] 10.7 AOPs for the immediate or defered benefit of | the spouse i ‘eaonif) | Income from the Asset transferred to a person oF | 388 AOPS for the immediste or deferred benefit of 10.8 the spouse _ _ GIA) [Income ofminorchild = [ea) —|Seltaccuired propery convened ino joint 10.10 \ra ly property overy of Tax 10.1 Object Sometimes assessee arranges to avoid income fax such as transfering incom *Seto another person or tamsering an asset o anther person. Thettrs he makes ‘uch an arrangement then Sections 60-65 arc there to nullity such arrangements. Unc ier such arrangements income transferred of ineome arising from a fae ‘rasferee shall be clubbed or inchided into the income of the transferor (ASSES ‘ill be taxable in his hands. > Clubbing is done in the Relevant Assessment Year: inthe Relevant Assessment Year when assessment 5 sferrng an asst but 102 Clubbing of income which is transferred without ransierring an iepatnaanc rss naan Jubbed inte the income Income transferred by an assessee to anher person wl De OF the asseasee if the following conditions ate fied some from an igniticantly. the clubbing is done ‘done by the assessee. (0) Assesse may be any personTacation Laws Chap, 1g any asset ) Assesses must be own! jset he must transfer income arising fi he mu ME OM that ay, (ii) Watbour transferning th another person. i) Such transfer may be tg revocable or irrevovable (vit) Such transter mast be without consideration. Example: Sr.No. Asset TL Income ~~ sre! Interest arising from such deposit of cag Te Ga depoted maak Debentures ‘Tnierest arising from debentures Shoes Dividend from such shares 4 Howe or Jewellery | Rent | If without transfering asset in the above examples. the assessee tansfem Ieterestarising from such deposited cash, Interest arising from debentures, ander feom shares without adequate consieration then such income transferred included inthe total income of the transferor (assessee). 10.3 Clubbing of income arising from the asset transferred under revocable or irrevocable transfer but without adequate consideration Where the asset is transferred under revocable er irrevocable transfer by the ass tw other person without adequate consideration them income arising 16 the transferee fren that asset iy clubbed int the income of the transferor. = 1S ithe Dividend would fe Ase —Tacome i! Cash deposited in the bank | Interest arising from such deposit of cash 2. |ebemures ———verest ansing trom debonures |3 Shares Dividend from such shares 4. [House or ewetery Rent 10.3.a, Transfer [Section 6318) Transfer for Sections. 60-62 arrangement 103.b, Revocable transfer of asset [Section 61] {tan asset is transferred under a revocable transfer without adequate consideration. ime arising from such asset to the transferee will be included in the income of! S trust, settlement, covenant, agreement, However, under Section 63( ction 63a), & transfer c revocable for Turpose of Section 60-62: = ane sl be dened fo Be revostle (Hit comains any provision 4 nied wision to rctransfer whole or part of the asset oF 1808 anlbing therefrom, by the transteror 10 any other person either direlly indirectly. [Section 634K}, oe (ii) Ufthe transferor has the ight i “ Tight Lo teassume powers over the asset or part of the * or income arising therefi el iy seion Funty és Tom either diretly or indisetly, (Section 6XCaNM) 17 fansfertrevocable for a specified ime period is given under Sextion [discussed later]. Therefore ate means the ‘sowing Tore, considering Sections 62/1) and 63(a), revocable 1" Sy — ~—a Clubbing of income ae if = sae (0 Fecocable Transfer _ a | Example Moe asst © tansfowed | Mi A uanon stews ; | re ‘rust and itis revocable ‘Sw house property to a trust for the | Wet Of Mr. B with the condition that it iS | during the Tifetime of the | revocable during the lifetime of Mr B. So its a| periciry evocable transfer and income from the asset willl | [as ___| be included in the income of Mi if asset is transferred 10 a. Mr. A transfers a house property to Mrs B with 2 Megson and it is revocable | the condition that itis revocable during the Mering the lifetime of the Iimect MB Soitasrncabieumteand |_| mansfere= income from the esset will be included in the _ income of MILA Tir wansfer contains any | Mr, A transfers house property 10 Mr. B on, | govsion to reiransfer whole | 1-1-1988 with the condition thar asset or part of pr part of the asset oF income | the asset or income or part ofthe income arising | diving thereltom, by the from that asset to Mr. B shall be wsed by Mr. A | transferor to any other person | or his family members. Itis revocable transfer | Uither directly or indirectly. and income arising from soch house property | shall be included in the income of Mr. A. It is | jimi wheter A as een 8 nah | ieee | not | 7) Ifthe transferor has the right | Mr A transfers a heuse property wo Mr, B with to reassume powers over the | the condition that he oF any of his family | ansel or part of the asset or | members has a right to use that house property | | income arising therefeom | for their benefit. It is a revocable transfer and | | enter directly or inireety, | income arising fom such hoese property shall | included in the income of Mr. A. tis immaterial | | whether A has exercised this right of ot | Tax treatment of income transferred or income arising from the asset transferred ander revocable transfer: It is important to rote that under revocable transfer income vansferted or income arising from the asset transferred would be included in the income ofthe transferor. It means clubbing will abNays take place trom the Previous Year when rome or asset is transferred and tis immaterial whether the transferor bas exec nah or not 10.3.0. Irrevocable transfer of. asset Any transfer which is not revocable under section 6: ‘evocable transfer of the assct is of two types: (2) transfer irrevocable for a specified periods (6) transfer irrevocable permanently. . (@) Transfer irrevocable fora spevified period (Section ‘ora specified period includes the following (i) Where the asset is transferred ‘under trust a lifetime of the beneficiary: °F a e the asset is transferred #0 4 PST (Where the asset is th tre ransferes: revocable during the lifetime ¢ ed this 3(a} shall be irrevocable. However, 62{))|2 Transfer irevocable rnd itis pot revocable during the person other than trust and it is not