manoj kumar saraswat
(Querist) 12 February 2011
This query is : Resolved
when an individual donate some jewelery to his/her father then what is his/her income tax liability.is this transaction make some capital gain for the donor. plz tell in details. thank you
1. First it is a Gift not a Donation. 2. This aspect is very well covered in section 56 of the Indian Income Tax Act, 1961. 3. Please refer to section 56(vi) which is very clear that such gifts do not attract tax in the hands of Donor.
(Expert) 12 February 2011
Jewelery is capital asset within the meaning of section 2(14) of income tax Act. By virtue of section 47 of Income tax act,gift is not transfer and hence does not attract Capital gain.
Though the donation of the nature referred to above does not come under taxable liability as per question 56(iv), the question is to be examined whether this is Gift or not within the meaning of the definition of Gift
Gift is defined under section 122 of the transfer of property Act. The word used there is Donor to donee hence it is wrong to say that donations are not gift When the necessary ingredients of the definition of Gift is fulfilled then the donation becomes gift. In this opinion Capital gain is not attracrted.