If some body gifts land to co-operative society, is it taxable to the society?
It is not taxable - neither in the hands of the donor or in the hands of the society. Section 56(2)(vii) covers only individuals and HUFs and not others.
However, the donor and the donor relationship is also important and it should be genuine transfer and not a sham transaction for the purpose of evading taxes, in which case, the entire transaction may be probed depending upon the quantum and facts of the case.
With effect from 1st Oct. 2009, gift of immovable property is taxable in the hands of recipient. However this clause is applicable only to individuals and HUF.
In view of this, gift of land received by a co-operative society is not taxable in the hands of the co-operative society.
Note: Advice given above is without any liability. The querist is advised to take personal advice before acting.
Yes, gift received by any other individual is taxable in the hands of recepitant.
Regards
Ankit Jain
The gift of land to cooperative society depends on whether voluntary contribution received will always be treated as income of the trusts or institution running for charitable purpose?
a. As per section 11(1)(d) of the Income Tax Act 1961 voluntary contributions received by the trust or charitable institutions with a specific direction that the contribution shall form part of the corpus of the trust or institution shall not be treated as income of the trusts or institution.
b) As per Section 12 of the Act, any voluntary contribution not with a specific direction that it will form part of the corpus will be treated as income of the trust or institution existing for charitable purposes.
c) As per section 12A of the Income Tax Act’ 1961, the benefit of Sections 11 & 12 will be available only if the trust or the institution is registered under the Income Tax Act as a trust or charitable institution u/s 12AA.
Therefore any gift to society will depend upon the following
Firstly contribution received with a specific direction that it forms part of the corpus of the trust is treated as follows: 1) If the trust or charitable institution is registered u/s 12AA of the Income Tax Act’1961: Then not taxable 2) If the trust or institution is not registered U/s 12AA- then it is taxable as per Sec 2 (24) (iia)
B) Voluntary contribution received (without direction that it forms part of corpus) is generally taxable under the head income from other sources.
Section 56(2) deals with the taxability of sum of money/property received without consideration.
As per this section, the value of any property received without consideration will be taxable in the hands of recipient. However, this applies only to an Individual (or) HUF.
In our opinion, prima facie,
since the recipient is a Co-operative society, the same will not be taxable in the hands of Co-operative society.
Exemption u/s 56(2)(vii) for gift recieved is applicable only to Individual and HUF not to Co-operative Societies.
Also, gift is not falling under the purview of section 80P to get the deduction.
Hence, gift received by the Co-operative socity is taxable.
CA. Rajeev P T
Email: ca.rajeevpt@gmail.com
Yes Gift to co-operative societyis taxable in the hands of society
Yes Gift to a Co-Operative Society from a Non Co-Operative Society without any specific direction that it forms part of the corpus is taxable under the head Income from Other Sources.
