Gift Tax Act, 1958
| Gift Tax Act, 1958 | |
|---|---|
 | |
| Enacted by | Parliament of India |
| Status: Repealed | |
This act has been repealed w.e.f. 1st October, 1998.
Gift Tax Act, 1958 was an Act of the Parliament of India which was enacted to impose tax on the act of giving or receiving gifts under certain circumstances as specified by the Act..
Charges of Gift Tax [1]
As per the Gift Tax Act, the gifts that exchanged hands post 1 April 1958 were subject to taxes as mention in Schedule I.
Post 1 April 1987, this was amended to the rate of 30% (Thirty percent) and included gifts that were made in that particular Assessment Year. On 1 October 1998 however, the applicability of Gift Tax ceased to exist.
Gift Tax on Transfers
The Gift Tax Act also made mention of applicability of the Act on certain transfers that took place. When a property was transferred for any other reason than adequate consideration, the amount by which the value of the property exceeded the value of consideration was considered to be a gift, and thus subject to tax.
In addition, when the consideration for which a property is transferred has not passed on the entire or part amount from the transferee to the transferor, the amount that had not passed too was subject to Gift Tax.
In cases related to forfeitures, releases, surrenders, or abandonment of certain contracts, debts, actionable claims, or even interest in property, the extent of value of the said action was also subject to Gift Tax, but only after the Assessing Officer found that the action was bona fide.
When the amount of appropriation is made on a property in cases where the party or tenant that has an interest in the party relinquishes it, then said appropriation that is benefited by the other person is termed as a gift and therefore subject to Gift Tax.
In case of a Hindu Undivided Family, when a member’s individual property is relinquished to the properties held by the family too, the Gift Tax Act was applicable.
Exemptions[2]
There were certain exemptions that were allowed under the Gift Tax. In case of the exchange of gifts between blood relatives, irrespective of the value of the gift, Gift Tax was not applicable.
Gift Tax was also not applicable in case of the transfers of immovable property that were situated outside the country.
Gifts that were received from relatives for marriage, including gifts to the daughter in law from the bridegroom’s parents, and gifts to the son in law from the bride’s parents were also exempt from tax.
Gifts received through a will or through inheritance as well as gifts to parents from their NRI sons and daughters through their NRE account were also under the Gift Tax exempt list.
References
- ↑ "Gifting is not always tax-free". DNA India. 2011-05-19. Retrieved 2013-03-13.
- ↑ "Gift Tax: What's in a Gift?". Money Control. 2012-02-16. Retrieved 2013-03-13.