Question

Q5.What is the tax treatment of sum of money received as gift under section
56(2)? Also explain the provisions relating to taxation of winning from lotteries?​

Answer 1

Answer:

1) Gift received from relative is exempt.

2) Gift received on the occasion other than marriage from non specified person shall be taxable under the head income from other sources.

3) Money received whether in cash or cheque in excess of Rs. 50,000/- from non specified persons shall be taxable.

Explanation:

Answer 2

As per the section gifts received are taxable for recipient under the head of other sources but there is no taxation for the donor.

• The endowments received are available in the possession of the beneficiary under the head of different Sources and there is no tax collection for the giver.
• Here gift implies any amount of cash, moveable property or resolute property which got without thought or deficient thought.

• Provision of winning from lottery include -

1. The money received is taxable under the head of other sources.
2. The income is taxable at a flat rate of 30%.