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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Mr. Rohan Mehta, a resident individual, received a gift of shares of a listed company from his friend, who is not a relative. The shares were gifted on a day when their fair market value was Rs 3,20,000. He also received Rs 30,000 cash from another non-relative on his birthday the same year. Assuming no other gifts and ignoring any exempt occasion, what amount is taxable in his hands under Income from Other Sources on account of these gifts?

Rs 3,50,000 is taxable. Gifts from non-relatives exceeding Rs 50,000 in aggregate in a year are taxed in full, not just the excess. The shares at Rs 3,20,000 and cash of Rs 30,000 total Rs 3,50,000, and a birthday is not an exempt occasion.

  1. ARs 3,20,000
  2. BRs 3,50,000Correct
  3. CRs 3,00,000
  4. DNil

Explanation

Gifts from non-relatives are taxable when the aggregate value received in the year exceeds Rs 50,000. Here the aggregate is Rs 3,20,000 + Rs 30,000 = Rs 3,50,000, which is above Rs 50,000, so the whole amount is taxable and not just the excess. Taxing only the shares ignores the cash gift. Deducting Rs 50,000 as a threshold exemption is wrong because the limit is not a deduction. The birthday is not an exempt occasion under the law.

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