GIFT-TAX ACT, 1958
(1) This Act may be called the Gift-tax Act, 1958.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall be deemed to have come into force on the 1st day of April, 1958.
In this Act, unless the context otherwise requires,—
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2[(ii) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 of the Income-tax Act;]
2[(iii) “assessee” means a person by whom gift-tax or any other sum of money is payable under this Act, and includes—
(a) every person in respect of whom any proceeding under this Act has been taken for the determination of gift-tax payable by him or by any other person or the amount of refund due to him or such other person;
(b) every person who is deemed to be an assessee under this Act;
(c) every person who is deemed to be an assess
1[(1)] Subject to the other provisions contained in this Act, there shall be charged for every 2[assessment year] commencing on and from the 1st day of April, 1958, 3[but before the 1st day of April, 1987,] a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person during the previous year (other than gifts made before the 1st day of April, 1957) at the rate or rates specified in 4[Schedule I].
5[(2) 6[Subject to the other provisions (including provisions for the levy of additional gift-tax) contained in this Act], there shall be charged for every assessment year commencing on and from the 1st day of April, 1987, gift-tax in respect of the gifts, if any, made by a person during the previous year, at the rate of thirty per cent. on the value of all taxable gifts.]
7[(3) Notwithstanding anything contained
1[(1)] For the purpose of this Act,—
(a) where property is transferred otherwise than for adequate consideration, the amount by which the 2[value of the property as on the date of the transfer and determined in the manner laid down in Schedule II] exceeds the value of the consideration shall be deemed to be a gift made by the transferor:
3[Provided that nothing contained in this clause shall apply in any case where the property is transferred to the Government or where the value of the consideration for the transfer is determined or approved by the Central Government or the Reserve Bank of India;]
(b) where property is transferred for a consideration which, having regard to the circumstances of the case, has not passed or is not intended to pass eith
(1) Gift-tax shall not be charged under this Act in respect of gifts made by any person—
(i) of immovable property situate outside the territories to which this Act extends;
(ii) of movable property situate outside the said territories unless the person—
(a) being an indvidual, is a citizen of India and is ordinarily resident in the said territories; or
(b) not being an individual, is resident in the said territories, during the previous year in which the gift is made;
1[(iia) being an individual who is not resident in India, to any person resident in India, of foreign currency or other foreign exchange [as defined, respectively, in clause (c) and clause
Section 5 of the Gift-Tax Act, 1958, provides specific exemptions from gift tax for certain types of gifts, establishing the scope and limitations of tax liability on gifts under Indian law. It aims to promote social and economic objectives by exempting particular gifts from taxation, especially those made on specific occasions or under certain conditions.
Section 5 delineates the scope of exemption from gift tax for particular categories of gifts, including gifts made in the course of carrying on a business, gifts to relatives on the occasion of marriage, gifts in contemplation of death, and gifts made for charitable purposes. The section also specifies conditions under which such gifts are exempted and clarifies the types of property and circumstances covered.
Section 5 applies to gifts that meet specified criteria, primarily focusing on the purpose, occasion, and bona fide nature of the gift. It excludes gifts that do not fulfill these legal conditions from exemption, thereby subjecting them to gift tax. The section's scope also extends to property location, the relationship between donor and recipient, and the timing of the gift.
While Section 5 primarily defines exemptions, violations—such as making a taxable gift without disclosure—may attract penalties under the Act. Penalties can include fines, interest, and prosecution, especially if the gift is deliberately concealed or falsely claimed as exempt.
"Scope of exemption" - Section 5 specifies categories of gifts exempted from gift tax, including gifts in the course of business, on marriage, or in contemplation of death, with specific conditions - [Sources: Commissioner of Income Tax VS Sarita P. Shirke, Commissioner of Gift Tax VS T. V. Sundaram Iyengar and Sons Limited].
"Occasion of marriage" - Gifts made to relatives on the occasion of marriage are exempt, but the exemption applies only if the gift is made "on the occasion of marriage," interpreted broadly to include gifts made in connection with marriage even if made years later, provided nexus is established - [Sources: A. Rudrakodi VS Commissioner of Income Tax, Commissioner of Gift Tax VS G. Venkataswamy].
"Gift in contemplation of death" - To qualify as a gift in contemplation of death, the donor must be seriously ill, with evidence showing imminent death, and the gift must be conditional upon death, as per Section 191 of the Indian Succession Act, 1925 - [Sources: Commissioner Of Gift Tax, Ernakulam VS Abdulkarimmohd, R. K. Garg: R. K. Karanjia: Madhu Mehta: P. K. Soi: S. S. Bedi VS Union Of India].
"Bona fide transfer" - For exemption under Section 5(1)(xiv), the gift must be bona fide, made with the genuine purpose of carrying on a business, with no element of transfer for tax evasion, and must involve actual transfer of property or interest - [Sources: V. Mohandas VS The Commissioner of Income Tax, Commissioner of Gift-tax VS B. K. Sampangiram].
"Relationship of donor and recipient" - Gifts to relatives such as spouses, children, or dependent relatives are often exempt, but the nature of relationship and dependency status at the time of gift are scrutinized to determine eligibility - [Sources: Indira Bai and Another VS Gift Tax Officer, City Circle Ii, Madras, Vadrevu Venkappa Rao VS Commissioner of Gift-tax, A. P. , Hyderabad].
"Time limit for exemption" - Certain exemptions, especially in cases of gifts in contemplation of death or made to relatives, are limited by time, e.g., gifts made more than five years before death are generally not exempt unless specific conditions are met - [Sources: Commissioner Of Wealth Tax VS Hashmatunnisa Begum, Commissioner of Gift Tax VS Meco-Tronics Private Limited].
"Interpretation of 'on the occasion of marriage'" - Courts have held that the phrase should be broadly construed to include gifts made in connection with marriage, even if made years after, if nexus or promise is established, emphasizing the relationship between the gift and marriage event - [Sources: Jacob VS The Commissioner Of Income Tax Ernakulam , Commissioner of Income Tax VS K. M. Khaja Moideen].
"Gifts in the course of business" - To qualify for exemption under Section 5(1)(xiv), the gift must be bona fide, made for the purpose of the business, and not merely a device to evade tax; the connection between gift and business activity is crucial - [Sources: V. Mohandas VS The Commissioner of Income Tax, Commissioner of Gift-tax VS B. K. Sampangiram].
"Gifts of property outside India" - Section 5 excludes gifts of movable property situated outside India unless the donor is an Indian citizen ordinarily resident in India; such gifts are subject to specific conditions for exemption - [Sources: Commissioner of Gift Tax VS K. A. Abdul Kader, 00100011107].
"Gifts to charitable institutions" - Gifts made to recognized charitable institutions are generally exempt, provided the purpose is genuine and the institution qualifies under Section 80G and related provisions; the deed's purpose and registration are scrutinized - [Sources: Commissioner of Gift Tax VS Meco-Tronics Private Limited, The Commissioner Of Gift Tax VS K. A. Abdul Razak].
"Aggregation of gifts" - The Act requires aggregation of all gifts made during the previous year for determining the total gift-tax liability, and exemptions are applied to the aggregate, not individual gifts - [Sources: Indira Bai and Another VS Gift Tax Officer, City Circle Ii, Madras].
"Property transferred for adequate consideration" - Gifts involving consideration, such as capital contribution or services, may not qualify as gratuitous gifts and thus may not be exempt under the relevant provisions - [Sources: V. Mohandas VS The Commissioner of Income Tax, Commissioner of Gift Tax VS G. Venkataswamy].
"Gifts made in the course of carrying on a business" - The gift must be in the ordinary course of business, bona fide, and not a device to avoid tax; the purpose and context are crucial for qualification - [Sources: Commissioner of Gift-tax VS B. K. Sampangiram, Commissioner of Gift Tax VS G. Venkataswamy].
"Gifts in respect of minors" - Gifts to minors are scrutinized to determine whether they qualify for exemption; the timing, purpose, and relationship influence the decision, with courts emphasizing the nexus with the occasion or purpose - [Sources: 02100013602, Jacob VS The Commissioner Of Income Tax Ernakulam ].
"Gifts made after long delay" - Gifts made long after the event (e.g., years after marriage) may still qualify if the nexus or promise is established, but the burden of proof is on the donor to show the connection - [Sources: A. Rudrakodi VS Commissioner of Income Tax, Niharika Jain VS Union of India].
"Legal interpretation" - Courts have emphasized the literal and purposive interpretation of 'on the occasion of marriage' and 'in contemplation of death,' favoring broad construction to uphold genuine social and familial transactions - [Sources: AMP Spg. & Wvg. Mills (P. ) Ltd. VS Income-tax Officer, A. Rudrakodi VS Commissioner of Income Tax].
"Penalties and penalties" - Non-disclosure or false declaration regarding gifts can attract penalties under the Act, including fines and prosecution, especially if the gift is not genuinely exempted - [Sources: , ].
"Legal distinction" - The distinction between gifts made as part of business activities and gratuitous gifts is crucial; the former may be exempt if bona fide and connected with the business, while the latter depends on occasion and relationship - [Sources: V. Mohandas VS The Commissioner of Income Tax, Commissioner of Gift-tax VS B. K. Sampangiram].
"Reconstitution of partnership" - Admission of minors or others into a partnership with contribution of capital may involve gift elements; courts analyze whether consideration exists to determine exemption eligibility - [Sources: Jacob VS The Commissioner Of Income Tax Ernakulam , Commissioner of Gift Tax VS G. Venkataswamy].
"Property location and jurisdiction" - Gifts of property outside India, especially movable property, are subject to specific exemptions, with location and citizenship status influencing applicability - [Sources: Commissioner of Gift Tax VS K. A. Abdul Kader, 00100011107].
"Constitutional validity" - Several judgments question the reasonableness and equality of provisions, especially regarding exemptions to certain classes, emphasizing the need for rational nexus with legislative objectives - [Sources: R. K. Karanjia VS Union of India, Nizamuddin VS Commissioner of Income Tax].
Section 5 of the Gift Tax Act, 1958, provides a framework for exemptions based on the nature, occasion, and purpose of gifts, with courts interpreting broad principles to uphold social and familial transactions. The scope extends to property location, relationship, and timing, with detailed scrutiny to prevent tax evasion while promoting bona fide gifts. The legal landscape emphasizes the importance of genuine intent, clear nexus with the occasion, and bona fide transfer, while also recognizing the potential for constitutional challenges based on equality and reasonableness.
References have been cited in square brackets corresponding to the provided sources.
(1) Subject to the provisions of sub-section (2), the value of any property, other than cash, transferred by way of gift shall, for the purpose of this Act, be its value as on the date on which the gift was made and shall be determined in the manner laid down in Schedule II.
(2) Where a person makes a gift which is not revocable for a specified period, the value of the property gifted shall be capitalised value of the income from such property during the period for which the gift is not revocable.]
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1. Subs. by Act 3 of 1989, sec. 81 (w.e.f. 1-4-1989).
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1. Section 6A omitted by Act 23 of 1986, sec. 43 (w.e.f. 1-4-1987). Earlier Section 6A was ins. by Act 5 of 1964, sec. 52(b) (w.e.f. 1-4-1964) and was omitted by Act 13 of 1966, sec. 41 (b) (w.e.f. 1-4-1966) and was again ins. by Act 41 of 1975, sec. 106 (w.e.f. 1-4-1976).
The income-tax authorities specified in section 116 of the Income-tax Act shall be the gift-tax authorities for the purposes of this Act and every such authority shall exercise the powers and perform the functions of a gift-tax authority under this Act in respect of any person within his jurisdiction, and for this purpose his jurisdiction under this Act shall be the same as he has under the Income-tax Act by virtue of orders or directions issued under section 120 of that Act (including orders or directions assigning concurrent jurisdiction) or under any other provision of that Act.
Explanation.—For the purposes of this section, the gift-tax authority having jurisdiction in relation to a person who has no income assessable to income-tax under the Income-tax Act shall be the gift-tax authority having jurisdiction in respect of the area in which that person resides.
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1. Section 7A omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 7A was ins. by Act 53 of 1962, sec. 5 (w.e.f. 1-4-1963) and was subs. by Act 20 of 1967, sec. 35 (b) (w.e.f. 1-4-1967) and again subs. by Act 67 of 1984), sec. 78 (w.e.f. 1-10-1984).
Section 118 of the Income-tax Act and any notification issued thereunder shall apply in relation to the gift-tax authorities as they apply in relation to the control of the corresponding income-tax authorities, except to the extent to which the Board may, by notification in the Official Gazette, otherwise direct in respect of any gift-tax authority.]
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1. Subs. by Act 4 of 1988, sec. 164 (w.e.f. 1-4-1988).
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1. Section 8A omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 8A was ins. by Act 29 of 1977, sec. 39 and Sch. V, Pt. III (w.e.f. 10-7-1978).
(1) The Board may, from time to time, issue such orders, instructions and directions to other gift-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board:
Provided that no such orders, instructions or directions shall be issued—
(a) so as to require any gift-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or
(b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or Commissioner (Appeals) in the exercise of his appellate functions.
(2) Without prejudice to the generality of
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1. Section 9A omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 9A was ins. by Act 53 of 1962, sec. 6 (w.e.f. 1-4-1963).
(1) The provisions of sections 124 and 127 of the Income-tax Act shall, so far as may be, apply for the purposes of this Act as they apply for the purposes of the Income-tax Act subject to the modifications specified in sub-section (2).
(2) The modifications referred to in sub-section (1) shall be the following, namely:—
(a) in section 124 of the Income-tax Act,—
(i) in sub-section (3), references to the provisions of the Income-tax Act shall be construed as references to the corresponding provisions of the Gift-tax Act;
(ii) sub-section (5) shall be omitted;
(b) in section 127 of the Income-tax Act, in the Explanation below sub-section 2[(4)], references to proc
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1. Section 11 omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 11 was subs. by Act 53 of 1962, sec. 7 (w.e.f. 1-4-1963) and was again subs. by Act 20 of 1967, sec. 35 (c) (w.e.f. 1-4-1967).
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1. Section 11AA omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 11AA was ins. as section 11A by Act 20 of 1967, sec. 35 (f) (w.e.f. 1-4-1967) and the original section 11A was re-numbered as section 11AA by Act 19 of 1970, sec. 27 (b) (w.e.f. 1-4-1970).
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1. Section 11B omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988). Earlier section 11A was subs. along with section 11 by Act 53 of 1962, sec. 7 (w.e.f. 1-4-1963), and section 11A was renumbered as section 11B by Act 20 of 1967, sec. 35 (7) (w.e.f. 1-4-1967).
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1. Section 12 omitted by Act 4 of 1988, sec. 165 (w.e.f. 1-4-1988).
1[(1) Every person who during a previous year has made by any taxable gifts, or is assessable in respect of the taxable gifts made by any other person under this Act, which, in either case, exceeded the maximum amount not chargeable to gift-tax, shall, on or before the 30th day of June of the corresponding assessment year, furnish a return of such gifts in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.
(2) Notwithstanding anything contained in any other provision of this Act, a return which shows the amount of taxable gifts below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished:
Provided that this sub-section shall not apply to a return furnished in response to a notice under section 16.]
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If any person has not furnished a return within the time allowed under sub-section (1) of section 13 or by a notice issued under clause (i) of sub-section (4) of section 15, or having furnished a return discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier:
Provided that—
(a) where such return or revised return relates to the assessment year commencing on the 1st day of April, 1987, or any earlier assessment year, it may be furnished at any time up to and inclusive of the 31st day of March, 1990 or before the completion of the assessment, whichever is earlier;
(b) whe
The return made under section 13 or section 14 shall be signed and verified—
2[(a) in the case of an individual,—
(i) by the individual himself;
(ii) where he is absent from India, by the individual himself or by some person duly authorised by him in this behalf;
(iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf; and
(iv) where, for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf:
Provided that in a case referred
(1) Where any tax is payable on the basis of any return furnished under section 13 or under section 14 or in response to a notice under clause (i) of sub-section (4) of section 15 or under section 16, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax, together with interest payable under any provision of this Act for any delay in furnishing the return, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest.
Explanation.—Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable.
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(1) (a) Where a return has been made under section 13 or section 14 or in response to a notice under clause (i) of sub-section (4),—
(i) if any tax or interest is found due on the basis of such return after adjustment of any amount paid by way of tax or interest, an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice issued under section 31 and all the provisions of this Act shall apply accordingly; and
(ii) if any refund is due on the basis of such return, it shall be granted to the assessee;
Provided that in computing the tax or interest payable by, or refundable to the assessee, the following adjustments shall be made in the taxable gifts declared in the return, namely:—
1[(1) If the Assessing Officer, 2[has reasons to believe] that the taxable gifts in respect of which any person is assessable under this Act (whether made by him or by any other person) have escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of this section and section 16A, serve on such person a notice requiring him to furnish within such period, 3[***], as may be specified in the notice, a return in the prescribed form and verfied in the prescribed manner, setting forth the taxable gifts made by him or by such other person during the previous year mentioned in the notice, in respect of which he is assessable, along with such other particulars as may be required by the notice, and may proceed to assess or reassess such gifts and also any other taxable gifts in respect of which such person is assessable, which
2[(1) No order of assessment shall be made under section 15 at any time after the expiry of 3[two years] from the end of the assessment year in which the gifts were first assessable:
4[Provided that,—
(a) where the gifts were first assessable in the assessment year commencing on the 1st day of April, 1987, or any ealier assessment year, such assessment may be made on or before the 31st day of March, 1991;
(b) where the gifts were first assessable in the assessment year commencing on the 1st day of April, 1988, such assessment may be made on or before the 31st day of March, 1992].
(2) No order of assessment or reassessment shall be made under section 16 after the expiry of two years from the end of the financial year in which the noti
(1) Where a return of gifts for any assessment year under sub-section (1) of section 13 or section 14, or in response to a notice under clause (i) of sub-section (4) of section 15, is furnished after the 30th day of June of such year, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent. for every month or part of a month comprised in the period commencing on the 1st day of July of the assessment year, and,—
(a) where the return is furnished after the 30th day of June ending on the date of furnishing of the return; or
(b) where no return has been furnished, ending on the date of completion of the assessment under sub-section (5) of section 15,
on the amount of tax payable on the taxable gifts as determined 2[under sub-section (1)
(1) If the 2[Assessing Officer], 3[Deputy Commissioner (Appeals)], 4[Commissioner(Appeals)], 5[Chief Commissioner or Commissioner] or Appellate Tribunal, in the course of any proceedings under this Act, is satisfied that any person—
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(b) has 7[***] failed to comply with a notice under sub-section (2) or sub-section (4) of section 15; or
(c) has concealed the particulars of any gift or deliberately furnished inaccurate particulars thereof,
he or it may, by order in writing, direct that such person shall pay by way of penalty—
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9[(ii) in the cases referred to in clause (b), in addition to the amount of gift-tax payable b
(1) If a person—
(a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by a gift-tax authority in the exercise of his powers under this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act, which a gift-tax authority may legally require him to sign; or
(c) to whom a summons is issued under sub-section (1) of section 36, either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce the books of account or documents at the place and time,
he shall pay, by way of penalty, a sum which shall not be less than five hundred rupe
It a person making a taxable gift pays into the treasury within fifteen days of his making the gift any part of the amount of tax due on the gift calculated at the rates specified in the Schedule 2[or at the rate specified in sub-section (2) of section 3], he shall, at the time of assessment under section 15, be given credit—
(i) for the amount so paid; and
(ii) for a sum equal to one-ninth of the amount so paid, so however, that such sum shall in no case exceed one-tenth of the tax due on the gift.
Explanation.—If a person makes more than one taxable gift in the course of a previous year, the amount of tax due on any one of such gifts shall be the difference between the total amount of tax due on the aggregate value of all the taxable gifts so far made, including the taxable
Where any stamp duty has been paid under any law relating to stamp duty in force in any State on an instrument of gift of property, the assessee shall be entitled to a deduction from the gift-tax payable by him of an amount equal to the stamp duty so paid or one-half of the gift-tax payable, before making the deduction under this section, whichever is less.]
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1. Section 18A subs. by Act 14 of 1982, sec. 39 (w.e.f. 1-4-1983). Earlier it was ins. by Act 10 of 1965, sec. 71 (ii) (w.e.f. 1-4-1965).
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1. Chapter IVA containing section 18B omitted by Act 3 of 1989, sec. 95 (P) (w.e.f. 1-4-1989). Earlier it was ins. by Act 4 of 1988, sec. 175 (w.e.f. 1-4-1989).
(1) Where a person dies, his executor, administrator, or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge, the gift-tax determined as payable by such person, or any sum which would have been payable by him under this Act if he had not died.
(2) Where a person dies whithout having furnished a return under section 13, or after having furnished a return which the 1[Assessing Officer] has reason to believe to be incorrect or incomplete, the 1[Assessing Officer] may make an assessment of the value of the taxable gifts made by such person and determine the gift-tax payable by him, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person if he had survived, require from the executor, administrator, or other legal r
(1) Notwithstanding anything contained in section 3, when it appears to the 2[Assessing Officer] that any individual may leave India during the current assessment year or shortly after its expiry and that he has no present intention of returning to India, the gifts made by such individual during the period from the expiry of the previous year for that assessment year up to the probable date of his departure from India, shall be chargeable to gift-tax in that assessment year.
(2) The taxable gifts made in each completed previous year or part of any previous year included in such period shall be chargeable to gift-tax at the rate or rates specified in the Schedule 3[or, as the case may be, at the rate specified in sub-section (2) of section 3], and separate assessments shall be made in respect of each such completed previous year or part of any previous year.
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(1) Where, at the time of making an assessment, it is brought to the notice of the 1[Assessing Officer] that a partition has taken place among the members of a Hindu undivided family, and the 1[Assessing Officer], after enquiry is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect and he shall make assessments 2[on the value of the taxable gifts] made by the family as such as if no partition has taken place and each member or group of members shall be liable jointly and severally for the tax assessed on the value of the taxable gifts made by the joint family as such.
(2) Where the 1[Assessing Officer] is not so satisfied, he may, by order, declare that such family shall be deemed for the purposes of this Act to continue to be a Hindu undivided family.
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(1) Where a firm or association of persons liable to pay gift-tax has been discontinued or dissolved, the 1[Assessing Officer] shall determine the gift-tax payable by the firm or association of persons as such as if no such discontinuance or dissolution has taken place.
(2) If the 1[Assessing Officer], the 2[Deputy Commissioner (Appeals)] 3[the Commissioner (Appeals)] or the Appellate Tribunal in the course of any proceedings under this Act in respect of any such firm or other association of persons as is referred to in sub-section (1) is satisfied that the firm or association is guilty of any of the acts specified in clause (a) or clause (b) or clause (c) of sub-section (1) of section 17, he or it may impose or direct the imposition of a penalty in accordance with the provisions of that section.
(3) Every person who was at the time of s
(1) Where an 2[Assessing Officer] after using all due and reasonable diligence cannot find the donor who had made any taxable gifts, for the purpose of service of notice under sub-section (2) of section 13 or under section 16, the 2[Assessing Officer] may make an assessment of the value of all such taxable gifts made by him and determine the gift-tax payable by him and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the donor, require from the donee or donees any accounts, documents or other evidence which might, under the provisions of section15, have been required from the donor.
(2) Where any assessment in respect of the taxable gifts made by the donor has been made under sub-section(1), every donee shall be liable for the gift-tax so assessed:
Provided that where the donees are more
(1) 3[Subject to the provisions of sub-section (1A), any person],—
(a) objecting to the value of 4[***] taxable gifts determined under this Act; or
(b) objecting to the amount of gift-tax determined as payable by him under this Act; or
(c) denying his liability to be assessed under this Act; or
5[(d) objecting to any penalty imposed by the Assessing Officer under section 17 6[***];]; or
(e) objecting to any order of the 7[Assessing Officer] under sub-section (2) of section 20;or
(f) objecting to any penalty imposed by the 8[Assessing Officer] under 9[sub-section (1) of section 221] of the Income-tax Act] as appl
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1. Section 22A omitted by Act 3 of 1989, sec. 95 (P) (w.e.f. 1-4-1989). Earlier it was ins. by Act 4 of 1988, sec. 177 (w.e.f. 1-4-1989).
1[(1) An assessee, objecting to an order passed by the 2[Deputy Commissioner (Appeals)] 3[or the Commissioner (Appeals)] 4[under section 17 or section 17A] of section 22 5[***] or sub-section (2) of section 36 6[***] may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him.]
(2) The Commissioner may, if he is not satisfied as to the correctness of any order passed by 7[a Deputy Commissioner (Appeals)] 3[or a Commissioner (Appeals) under section 22 direct the 8[Assessing Officer] to appeal to the Appellate Tribunal against such order, and such appeal may be made at any time before the expiry of sixty days of the date on which the order is communicated to the Commissioner.
9[(2A) The 8[Assessing Officer] or the assessee, as the case may be, on receipt of the notice that an appeal against
(1) The Commissioner may, either on his own motion or on application made by an assessee in this behalf, call for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to him, and may make such inquiry or cause such inquiry to be made, and, subject to the provisions of this Act, pass such order thereon not being an order prejudicial to the assessee, as the Commissioner thinks fit:
Provided that the Commissioner shall not revise any order under this sub-section in any case—
(a) where an appeal against the order lies to the 1[Deputy Commissioner (Appeals)] 2[or to the Commissioner (Appeals)] or to the Appellate Tribunal and the time within which such appeal can be made has not expired or, 3[in the case, of an appeal to the Commissoner (Appeals) or to the Appellate Tribunal], the
2[(1) An assessee objecting to an order passed by the 1[Chief Commissioner or Commissioner] 3[under section 17 or section 17A] or to an order of enhancement passed by him under section 24 4[or an order passed by the Director-General or Director under section 17A] may appeal to the Appellate Tribunal within sixty days of the date on which the order is communicated to him.]
(2) An appeal to the Appellate Tribunal under sub-section (1) shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by 5[a fee of 6[two hundred rupees]].
(3) The provisions of 7[sub-sections (3),(5),(9) and (10) of section 23 shall apply in relation to any appeal under this section as they apply in relation to any appeal under that section.
&
1[(1) The assessee or the 2[Chief Commissioner or Commissioner] may, within sixty days of the date upon which he is served with notice of an order under section 23 or section 25 3[or clause (e) of sub-section (1) of section 34], by application in the prescribed form, accompanied, where the application is made by the assessee, by 4[a fee of 5[two hundred rupees]], require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court.
(2) The Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period specified in sub-section (1), allow it to
When a case has been stated to the High Court under section 26, it shall be heard by a Bench of not less than two Judges of the High Court and shall be decided in accordance with the opinion of such Judges or of the majority of such Judges, if any:
Provided that where there is no such majority, the Judges shall state the point of law upon which they differ and the case shall then be heard upon that point only by one or more of the Judges of the High Court, and such point shall be decided according to the opinion of the majority of the Judges who have heard the case, including those who first heard it.
(1) An appeal shall lie to the Supreme Court from any judgment of the High Court delivered on a case stated under section 26 in any case which the High Court certifies as a fit case for appeal to the Supreme Court.
(2) Where the judgment of the High Court is varied or reversed on appeal under this section, effect shall be given to the order of the Supreme Court in the manner provided in sub-section (6) of section 26.
(3) The High Court may, on application made to it for the execution of any order of the Supreme Court in respect of any costs awarded by it, transmit the order for execution to any Court subordinate to the High Court.
Notwithstanding that a reference has been made to the High Court or the Supreme Court or an appeal has been preferred to the Supreme Court, tax shall be payable in accordance with the assessment made in the case.]
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1. Ins. by Act 53 of 1962, sec. 22 (w.e.f. 1-4-1963).
In this Chapter, “High Court” means—
(i) in relation to any State, the High Court of that State;
1[(ii) in relation to the Union territory of Delhi, the High Court of Delhi;
2[(iia) [***]]
3[(iii) in relation to the Union Territories of Arunachal Pradesh *and Mizoram, the Gauhati High Court (the High Court of Assam, Nagaland, Meghalaya, Manipur and Tripura);]
(iv) in relation to the Union territory of Andaman and Nicobar Islands, the High Court at Calcutta;
(v) in relation to the Union territory of 4[Lakshadweep], the High Court of Kerala;
5[(va) in relation to t
Subject to the provisions of this Act, gift-tax shall be payable by the donor but when in the opinion of the 2[Assessing Officer] the tax cannot be recovered from the donor, it may be recovered from the donee:
Provided that where the donees are more than one, they shall be jointly and severally liable for the amount of tax determined to be payable by the donor:
Provided further that the amount of tax which may be recovered from each donee shall not exceed the value of the gift made to him as on the date of the gift.]
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1. Subs. by Act, 53 of 1962, sec. 23 (w.e.f. 1-4-1963).
2. Subs. by Act 4 of 1988, sec. 161, for “Gift-tax Officer” (w.e.f. 1-4-19
Gift-tax payable in respect of any gift comprising immovable property shall be a first charge on that property but any such charge shall not affect the title of a bona fide purchaser for valuable consideration without notice of the charge.
When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the 2[Assessing Officer] shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.]
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1. Subs. by Act 53 of 1962, sec. 24 (w.e.f. 1-4-1963).
2. Subs. by Act 4 of 1988, sec. 161, for “Gift-tax Officer” (w.e.f. 1-4-1988).
(1) Any amount specified as payable in a notice of demand under section 31 shall be paid within 2[thirty days] of the service of the notice at the place and to the person mentioned in the notice:
Provided that, where the 3[Assessing Officer] has any reason to believe that it will be detrimental to revenue if the full period of 2[thirty days] aforesaid is allowed, he may, with the previous approval of the 4[Deputy Commissioner], direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of 2[thirty days] aforesaid, as may be specified by him in the notice of demand.
(2) If the amount specified in any notice of demand under section 31 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at 5[one and one-half per cent.
The provisions contained in 2[sections 221 to 227, 228A], 229, 231 and 232 of the Income-tax Act and the Second and Third Schedules to that Act and any rules made thereunder shall, so far as may be, apply as if the said provisions were provisions of this Act and referred to gift-tax and sums imposed by way of penalty, fine and interest under this Act instead of to income-tax and sums imposed by way of penalty, fine and interest under that Act 3[and to the corresponding gift-tax authorities instead of to the income-tax authorities specified therein].
Explanation I.—Any reference to sub-section (2) or sub-section (6) of section 220 of the Income-tax Act in the said provisions of that Act or the rules made thereunder shall be construed as references to sub-sections (2) and (6) respectively of section 32 of this Act.
4[Explanation II.—The Ch
(1) Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the 1[Assessing Officer] shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make claim in that behalf:
2[Provided that where, by the order aforesaid.—
(a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;
(b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the 3[taxable gifts] returned by the assessee.]
4[(2) Where refund of any amo
(1) With a view to rectifying any mistake apparent from the record—
(a) The 2[Assessing Officer] may amend any order of assessment or of refund or any other order passed by him;
3[(aa) a gift-tax authority may amend any intimation sent by it under sub-section (1) of section 15 or enhance or reduce the amount of refund granted by it under that sub-section;]
4[(b) the Deputy Director or Deputy Commissioner or Director or Commissioner or Deputy Commissioner (Appeals) or Commissioner (Appeals) may amend any order passed by him under section 17A;
(c) the Deputy Commissioner (Appeals) or Commissioner (Appeals) may amend any order passed by him under Section 22 5[***];
(d)
(1) If any person fails without reasonable cause,—
(a) to furnish in due time any return of gifts under this Act;
(b) to produce, cause to be produced, on or before the date mentioned in any notice under 1[***] sub-section (4) of section 15, such accounts, records and documents as are referred to in the notice;
2[***]
he shall, on conviction before a magistrate, be punishable with fine which may extend to rupees ten for every day during which the default continues.
(2) If a person makes a statement in a verification in any return of gifts furnished under this Act or in a verification mentioned in section 22, 23 or 25 which is false, and which he either knows or believes to be false, or
(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributa
(1) Where an offence under this Act has been committed by a Hindu undivided family, the Karta thereof shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render the karta liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a Hindu undivided family and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any member of the Hindu undivided family, such member shall also be deemed to be guilty of that offence a
(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the Act charged as an offence in that prosecution.
Explanation.—In this sub-section, “culpable mental state” includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact.
(2) For the purposes of this section, a fact is said to be proved only when the Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.]
—————
&nb
Entries in the records or other documents in the custody of a gift-tax authority shall be admitted in evidence in any proceedings for the prosecution of any person for an offence under this Act, and all such entries may be proved either by the production of the records or other documents in the custody of the gift-tax authority containing such entries, or by the production of a copy of the entries certified by the gift-tax authority having custody of the records or other documents under its signature and stating that it is a true copy of the original entries and that such original entries are contained in the records or other documents in its custody.]
—————
1. Ins. by Act 3 of 1989, sec. 92 (w.e.f. 1-4-1989).
(1) The 2[Assessing Officer], the 3[Deputy Commissioner (Appeals)], 4[the Commissioner (Appeals),] the 5[Chief Commissioner or Commissioner] and the Appellate Tribunal shall, for the purposes of this Act, have the same powers as are vested in a Court under the Code of Civil Procedure 1908 (5 of 1908), when trying a suit in respect of the following matters, namely:—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a banking company and examinaing him on oath;
(c) compelling the production of books of account and other documents; and
(d) issuing commissions.
6[(1A) If the Director-General or Director or Deputy Director or Assi
1[Where, for the purposes of this Act, it appears necessary for any gift-tax authority to obtain any statement or information from any person or banking company,] 2[such gift-tax authority] may serve a notice requiring such person, on or before a date to be therein specified, to furnish such statement or information on the points specified in the notice, and that person shall, notwithstanding anything in any law to the contrary, be bound to furnish such statement or information to 2[such gift-tax authority]:
Provided that no legal practitioner shall be bound to furnish any statement or information under this section based on any professional communications made to him otherwise than as permitted by section 126 of the Indian Evidence Act, 1872 (1 of 1872).
—————
&nb
Whenever in respect of any proceeding under this Act any gift-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises such jurisdiction, the authority so succeeding may continue the proceeding from the stage at which the proceeding was left by this predecessor:
1[Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard.]
—————
1. Ins. by Act 53 of 1962, sec. 29 (w.e.f. 1-4-1963).
In computing the period of limitation prescribed for an appeal or an application under this Act, the day on which the order complained of was served and if the assessee was not furnished with a copy of the order when the notice of the order was served upon him, the time requisite for obtaining a copy of such order, shall be excluded.]
—————
1. Subs. by Act 53 of 1962, sec. 30 (w.e.f. 1-4-1963).
(1) A notice or a requisition under this Act may be served on the person therein named either by post or as if it were a summons issued by a Court under the Code of Civil Procedure, 1908 (5 of 1908).
(2) Any such notice or requisition may, in the case of a firm or a Hindu undivided family, be addressed to any member of the firm or to the manager or any adult male member of the family, and in the case of a company or association of persons be addressed to the principal officer thereof.
1[(3) After a finding of total partition has been recorded by the 2[Assessing Officer] under section 20 in respect of any Hindu family, notices under this Act in respect of the gifts made by the family shall be served on the person who was the last manager of the Hindu family, or if such person is dead, then on all surviving adults who were members of the H
1[***]
—————
1. Section 41 omitted by Act 5 of 1964, sec. 52 (e) (w.e.f. 1-4-1964). Earlier it was subs. by Act 53 of 1962, sec. 32 (w.e.f. 1-4-1963).
(1) If the Central Government is of opinion that it is necessary or expedient in the public interest to publish the names of any assessees and any other particulars relating to any proecedings 2[or prosecutions] under this Act in respect of such assessees, it may cause to be published such names and particulars in such manner as it thinks fit.
3[(2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for presenting an appeal to the 4[Deputy Commissioner (Appeals)] 5[or, as case may be, the Commissioner (Appeals)] has expired without an appeal having been presented or the appeal, if presented, has been disposed of.]
Explanation.—In the case of a firm, company or other association of persons, the names of the partners of the firm, directors, managing agents, secretaries and treas
Where a person makes an application to the 2[Chief Commissioner or Commissioner] in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act, the 2[Chief Commissioner or Commissioner] may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any Court of law.]
—————
1. Section 41B subs. by Act 5 of 1964, sec. 52 (f) (w.e.f. 1-4-1964). Earlier it was ins. by Act 28 of 1960, sec. 13 (w.e.f. 1-4-1960).
2. Subs. by Act 4 of 1988, sec. 161, for “Commissioner” (w.e.f. 1-4-1988).
No return of gifts, assessment, notice summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of gifts, assessment, notice, summons or other proceeding, if such return of gifts, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.]
—————
1. Ins. by Act 41 of 1975, sec. 122 (w.e.f. 1-10-1975).
No suit shall lie in any civil court to set aside or modify 1[any proceeding taken or order made] under this Act, and no prosecution, suit or other legal proceeding shall lie against 2[the Government or] any officer of the Government for anything in good faith done or intended to be done under this Act.
—————
1. Subs. by Act 26 of 1988, sec. 71, for “any order made” (w.e.f. 1-3-1988). Earlier the words “any order made” were subs. by Act 11 of 1987, sec. 91 (w.e.f. 1-3-1987).
2. Ins. by Act 5 of 1964, sec. 52 (g) (w.e.f. 1-4-1964).
An assessee who is entitled to or required to attend before any gift-tax authority or the Appellate Tribunal in connection with any proceeding under this Act, except where he is required under this Act to attend in person, may attend by a person who would be entitled to represent him before any Income-tax authority or the Appellate Tribunal under section 288 of the Income-tax Act.]
—————
1. Subs. by Act 53 of 1962, sec. 34 (w.e.f. 1-4-1963).
Any assessee who is entitled or required to attend before any gift-tax authority or the Appellate Tribunal in connection with any matter relating to the valuation of any asset, except where he is required under this Act to attend in person, may attend by a registered valuer.
Explanation—In this section “registered valuer” has the same meaning as in clause (oaa) of section 2 of the Wealth-tax Act, 1957 (27 of 1957)].
—————
1. Ins. by Act 45 of 1972, sec. 24 (w.e.f. 1-1-1973).
1[The Central Government may enter into an agreement with the Government of any reciprocating country—
(a) for the avoidance or relief of double taxation with respect to gift-tax payable under this Act and under the corresponding law in force in the reciprocating country, or
(b) for exchange of information for the prevention of evasion or avoidance of gift-tax chargeable under this Act or under the corresponding law in force in that country or investigation of cases of such evasion or avoidance, or
(c) for recovery of tax under this Act and under the corresponding law in force in that country,
and may, by notification in the Official Gazette, make such provision as may be necessary for implementing the agreement.]
&n
The amount assessed in accordance with the foregoing provisions of this Act as being the value of all taxable gifts shall be rounded off to the nearest multiple of ten rupees and, for this purpose, any part of a rupee consisting of paise shall be ignored and thereafter, if such amount is not a multiple of ten rupees, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and, if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten; and the amount so rounded off shall be deemed to be the value of all taxable gifts of the assessee for the purposes of this Act.
—————
1. Ins. by Act 42 of 1970, sec. 70 (w.e.f. 1-4-1971).
The amount of gift-tax, interest, penalty, fine or any other sum payable, and the amount of refund due, under the provisions of this Act, shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee, and if such part is less than fifty paise, it shall be ignored.]
—————
1. Ins. by Act 42 of 1970, sec. 70 (w.e.f. 1-4-1971).
The provisions of this Act shall not apply to gifts made by
a. a Government company as defined in section 617 of the Companies Act, 1956; (1 of 1956.)
b. a corporation established by a Central, State or Provincial Act ;
c. any company (other than a private company as defined in section 3 of the Companies Act, 1956): (1 of 1956.)
Provided that the affairs of the company or the shares in the company carrying more than fifty per cent. of the total voting power were at no time during the previous year controlled or held by less than six persons;
d. a company which is a subsidiary of and in which more than half the nominal value of equity share capital is held by a company referred to in clause (c);1(da) an
(1) The Board may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, rules made under this section may provide for—
(a) the manner in which the value of any property may be determined;
(b) the form in which returns under this Act shall be made and the manner in which they shall be verified;
(c) the form in which appeals and applications under this Act may be made, and the manner in which they shall be verified;
1[(cc) the circumstances in which, the conditions subject to which and the manner in which, the 2[Deputy Commissioner (Appeals)] 3[or the Com
If the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly or removing any diffculty that may arise as a result to the application of this Act to the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, or in the case of the Union territory of Pondicherry, for implementing any provision of the Treaty of Cession concluded between France and India on the 28th day of May, 1956, the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of gift-tax in favour of any class of gifts or in regard to the whole or any part of the gift made by any assessee or class of assessees:
Provided that the power conferred by this section shall not be exercisable after the 31st day of March, 1967, except for the purpose of rescinding an exemption, reduction or
(1) If any difficulty arises in giving effect to the provisions of this Act as amended by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), the Central Government may, by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty:
Provided that no such order shall be made after the expiration of three years from the 1st day of April, 1988.
(2) Every order made under sub-section (1) shall be laid before each House of Parliament.]
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1. Ins. by Act 4 of 1988, sec. 185 (w.e.f. 1-4-1988).
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