Chapter 5: Income from Other Sources & Deemed Gifts

⚡ Fast-Track High-Yield Revision Income-tax Act, 2025 & FA 2026 Ready

⚡ Fast-Track Quick Notes 📖 Full In-Depth Notes (Theory + TYKs)

1. Deemed Gifts Architecture (Section 56(2)(x))

Asset Category	Nature of Receipt	Threshold Limit	Taxable Quantum (IFOS)
Sum of Money	Without consideration	Aggregate > ₹ 50,000 in a FY	Entire sum is taxable.
Immovable Property	Without consideration	Stamp Duty Value > ₹ 50,000	Full Stamp Duty Value is taxable.
Immovable Property	Inadequate consideration	$( ext{SDV} - ext{Consideration}) > ₹ 50,000$ AND $> 10\%$ of Consideration	Difference between SDV and Consideration.
Movable Property (Specified)	Without consideration	Aggregate Fair Market Value > ₹ 50,000	Full Fair Market Value is taxable.
Movable Property (Specified)	Inadequate consideration	Aggregate $( ext{FMV} - ext{Consideration}) > ₹ 50,000$	Difference between FMV and Consideration.

2. Statutory Exceptions to Section 56(2)(x)

Section 56(2)(x) does NOT apply to any sum of money or property received:

From any Relative (Spouse, brother/sister, brother/sister of spouse, lineal ascendant/descendant).
On the occasion of the Marriage of the individual.
Under a Will or by way of Inheritance.
In contemplation of Death of the payer.
From any Local authority or Trust/Institution registered u/s 12A/12AB.

3. Dividend Taxation Framework

Recipient Assessee	Taxability & Rates	Allowable Deductions	TDS Provisions
Resident Shareholders	Normal slab rates / corporate rates	Only Interest expense u/s 57 capped at 20% of dividend income.	Sec 194 @ 10% if dividend > ₹ 5,000.
Domestic Companies	Normal rates (Eligible for Sec 80M deduction)	Interest expense capped at 20%	Sec 194 @ 10%.
Non-Residents / FPIs	Special rate @ 20% u/s 115A (or DTAA rate)	No deduction permitted u/s 57.	Sec 195 / 196D.

4. Family Pension Deduction (Sec 57(iia))

Standard Deduction on Family Pension:
• Default Regime (Sec 115BAC / Sec 202): Lower of 33.33% (1/3rd) of pension or ₹ 25,000 (increased from ₹ 15,000 by Finance Act).
• Normal / Optional Regime: Lower of 33.33% (1/3rd) of pension or ₹ 15,000.

5. High-Frequency Exam Traps

Trap 1: Gifts received on Birthday or Anniversary!
Exemption is strictly limited to gifts received on the occasion of MARRIAGE. Gifts received on birthdays, engagements, or marriage anniversaries from non-relatives are 100% TAXABLE if aggregate exceeds ₹ 50,000!

Trap 2: Repeal of Angel Tax (Section 56(2)(viib))!
Finance Act abolished the angel tax provision on issue of unlisted shares at premium exceeding FMV for all share issuances w.e.f. AY 2025-26.