If the following conditions are satisfied then value prescribed for movable property (*) received by an individual or HUF will be charged to tax:
- Prescribed movable property is received without consideration (i.e., received as gift).
- The aggregate fair market value of such property received by the taxpayer during the year exceeds Rs. 50,000
In above case, the fair market value of the prescribed movable property will be treated as income of the receiver.
(*) Prescribed movable property means shares/securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art and bullion, being capital asset of the taxpayer.
Considering the above definition, nothing will be charged to tax in respect of gift of any item being a movable property other than covered in the above definition, e.g.,Nothing will be charged to tax in respect of a television set received as gift, because a television set is not covered in the definition of prescribed movable property.
If the given conditions are satisfied, then value of prescribed movable property received without consideration, i.e., received as gift by an individual or HUF is charged to tax. However, in the following cases nothing will be charged to tax in respect of prescribed movable property received without consideration:
- Property received from relatives.
- Property received by a HUF from its members.
- Property received on the occasion of the marriage of the individual.
- Property received under will/ by way of inheritance.
- Property received in contemplation of death of the donor.
- Property received from a local authority as defined under section 10(20) of the Income-tax Act).
- Property received from any fund, foundation, university, other educational institution, hospital or other medical institution, any trust or institution referred to in section 10(23C).
- Property received from or by a trust or institution registered undersection 12AA or section 12A.
- Any shares received by an individual or HUF, as a consequence of business re-organisation of co-operative bank or demerger or amalgamation of a company [as referred to in clause (vicb) or clause (vid) or clause (vii) of section 47]
- from an induvidual by a trust created or established solely for the benefit of relative of individual.
- from such class of persons and subject to conditions as my be prescribed.
