Section - 56, Income-tax Act, 1961-2014

F.Income from other sources

Section - 50C, Income-tax Act, 1961-2015

Special provision for full value of consideration in certain cases.
50C. (1) Where the consideration received or accruing as a result of the transfer by an
assessee of a capital asset, being land or building or both, is less than the value adopted
or assessed or assessable by any authority of a State Government (hereafter in this
section referred to as the "stamp valuation authority") for the purpose of payment of
stamp duty in respect of such transfer, the value so adopted or assessed or assessable
shall, for the purposes of section 48, be deemed to be the full value of the consideration
received or accruing as a result of such transfer.
(2) Without prejudice to the provisions of sub-section (1), where
(a) the assessee claims before any Assessing Officer that the value adopted or assessed
or assessable by the stamp valuation authority under sub-section (1) exceeds the fair
market value of the property as on the date of transfer;
(b) the value so adopted or assessed or assessable by the stamp valuation authority
under sub-section (1) has not been disputed in any appeal or revision or no reference
has been made before any other authority, court or the High Court,
the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer
and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5)
and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of
section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of
the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in
relation to such reference as they apply in relation to a reference made by the Assessing
Officer under sub-section (1) of section 16A of that Act.
Explanation 1.For the purposes of this section, "Valuation Officer" shall have the
same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).

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Explanation 2.For the purposes of this section, the expression "assessable" means the
price which the stamp valuation authority would have, notwithstanding anything to the
contrary contained in any other law for the time being in force, adopted or assessed, if
it were referred to such authority for the purposes of the payment of stamp duty.
(3) Subject to the provisions contained in sub-section (2), where the value ascertained
under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp
valuation authority referred to in sub-section (1), the value so adopted or assessed or
assessable by such authority shall be taken as the full value of the consideration
received or accruing as a result of the transfer.

Income from other sources.

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56. (1) Income of every kind which is not to be excluded from the total income under
this Act shall be chargeable to income-tax under the head Income from other sources,
if it is not chargeable to income-tax under any of the heads specified in section 14,
items A to E.
(2) In particular, and without prejudice to the generality of the provisions of sub-section
(1), the following incomes, shall be chargeable to income-tax under the head Income
from other sources, namely :
(i) dividends ;
96

[(ia) income referred to in sub-clause (viii) of clause (24) of section 2 ;]

97

[(ib) income referred to in sub-clause (ix) of clause (24) of section 2 ;]

98

[(ic) income referred to in sub-clause (x) of clause (24) of section 2, if such income is
not chargeable to income-tax under the head Profits and gains of business or
profession ;]
99

[(id) income by way of interest on securities, if the income is not chargeable to

income-tax under the head Profits and gains of business or profession ;]
(ii) income from machinery, plant or furniture belonging to the assessee and let on hire,
if the income is not chargeable to income-tax under the head Profits and gains of
business or profession ;
(iii) where an assessee lets on hire machinery, plant or furniture belonging to him and
also buildings, and the letting of the buildings is inseparable from the letting of the said

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machinery, plant or furniture, the income from such letting, if it is not chargeable to
income-tax under the head Profits and gains of business or profession ;
1

[(iv) income referred to in sub-clause (xi) of clause (24) of section 2, if such income is
not chargeable to income-tax under the head Profits and gains of business or
profession or under the head Salaries ;]
2

[(v) where any sum of money exceeding twenty-five thousand rupees is received
without consideration by an individual or a Hindu undivided family from any person on
or after the 1st day of September, 2004 3[but before the 1st day of April, 2006], the
whole of such sum :
Provided that this clause shall not apply to any sum of money received
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer; or
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[(e) from any local authority as defined in the Explanation to clause (20) of section 10;
or
(f) from any fund or foundation or university or other educational institution or hospital
or other medical institution or any trust or institution referred to in clause (23C) of
section 10; or
(g) from any trust or institution registered under section 12AA.]
Explanation.For the purposes of this clause, relative means
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi);]
5

[(vi) where any sum of money, the aggregate value of which exceeds fifty thousand
rupees, is received without consideration, by an individual or a Hindu undivided family,
in any previous year from any person or persons on or after the 1st day of April, 2006

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[but before the 1st day of October, 2009], the whole of the aggregate value of such
sum:
Provided that this clause shall not apply to any sum of money received
(a) from any relative; or
(b) on the occasion of the marriage of the individual6a; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer; or
(e) from any local authority as defined in the Explanation to clause (20) of section 10;
or
(f) from any fund or foundation or university or other educational institution or hospital
or other medical institution or any trust or institution referred to in clause (23C) of
section 10; or
(g) from any trust or institution registered under section 12AA.
Explanation.For the purposes of this clause, relative means
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi);]
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[(vii) where an individual or a Hindu undivided family receives, in any previous year,
from any person or persons on or after the 1st day of October, 2009,
(a) any sum of money, without consideration, the aggregate value of which exceeds
fifty thousand rupees, the whole of the aggregate value of such sum;
8

[(b) any immovable property,

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees,
the stamp duty value of such property;
(ii) for a consideration which is less than the stamp duty value of the property by an
amount exceeding fifty thousand rupees, the stamp duty value of such property as
exceeds such consideration:

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Provided that where the date of the agreement fixing the amount of consideration for
the transfer of immovable property and the date of registration are not the same, the
stamp duty value on the date of the agreement may be taken for the purposes of this
sub-clause:
Provided further that the said proviso shall apply only in a case where the amount of
consideration referred to therein, or a part thereof, has been paid by any mode other
than cash on or before the date of the agreement for the transfer of such immovable
property;]
(c) any property, other than immovable property,
(i) without consideration, the aggregate fair market value of which exceeds fifty
thousand rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property
by an amount exceeding fifty thousand rupees, the aggregate fair market value of such
property as exceeds such consideration :
Provided that where the stamp duty value of immovable property as referred to in subclause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of
section 50C, the Assessing Officer may refer the valuation of such property to a
Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155
shall, as far as may be, apply in relation to the stamp duty value of such property for the
purpose of sub-clause (b) as they apply for valuation of capital asset under those
sections :
Provided further that this clause shall not apply to any sum of money or any property
received
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer or donor, as the case may be; or
(e) from any local authority as defined in the Explanation to clause (20) of section 10;
or
(f) from any fund or foundation or university or other educational institution or hospital
or other medical institution or any trust or institution referred to in clause (23C) of
section 10; or
(g) from any trust or institution registered under section 12AA.
Explanation.For the purposes of this clause,
(a) assessable shall have the meaning assigned to it in the Explanation 2 to subsection (2) of section 50C;

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(b) fair market value of a property, other than an immovable property, means the
value determined in accordance with the method as may be prescribed9;
(c) jewellery shall have the meaning assigned to it in the Explanation to sub-clause
(ii) of clause (14) of section 2;
(d) property 10[means the following capital asset of the assessee, namely:]
(i) immovable property being land or building or both;
(ii) shares and securities;
(iii) jewellery;
(iv) archaeological collections;
(v) drawings;
(vi) paintings;
(vii) sculptures; 11[***]
(viii) any work of art; 12[or]
12

[(ix) bullion;]

13

[(e) relative means,

(i) in case of an individual

(A) spouse of the individual;
(B) brother or sister of the individual;
(C) brother or sister of the spouse of the individual;
(D) brother or sister of either of the parents of the individual;
(E) any lineal ascendant or descendant of the individual;
(F) any lineal ascendant or descendant of the spouse of the individual;
(G) spouse of the person referred to in items (B) to (F); and
(ii) in case of a Hindu undivided family, any member thereof;]
(f) stamp duty value means the value adopted or assessed or assessable by any
authority of the Central Government or a State Government for the purpose of payment
of stamp duty in respect of an immovable property;]

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[(viia) where a firm or a company not being a company in which the public are
substantially interested, receives, in any previous year, from any person or persons, on
or after the 1st day of June, 2010, any property, being shares of a company not being a
company in which the public are substantially interested,
(i) without consideration, the aggregate fair market value of which exceeds fifty
thousand rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property
by an amount exceeding fifty thousand rupees, the aggregate fair market value of such
property as exceeds such consideration :
Provided that this clause shall not apply to any such property received by way of a
transaction not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or
clause (vid) or clause (vii) of section 47.
Explanation.For the purposes of this clause, fair market value of a property, being
shares of a company not being a company in which the public are substantially
interested, shall have the meaning assigned to it in the Explanation to clause (vii);]
15

[(viib) where a company, not being a company in which the public are substantially
interested, receives, in any previous year, from any person being a resident, any
consideration for issue of shares that exceeds the face value of such shares, the
aggregate consideration received for such shares as exceeds the fair market value of the
shares:
Provided that this clause shall not apply where the consideration for issue of shares is
received
(i) by a venture capital undertaking from a venture capital company or a venture capital
fund; or
(ii) by a company from a class or classes of persons as may be notified by the Central
Government in this behalf.
Explanation.For the purposes of this clause,
(a) the fair market value of the shares shall be the value
(i) as may be determined in accordance with such method as may be prescribed16; or
(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer,
based on the value, on the date of issue of shares, of its assets, including intangible
assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises
or any other business or commercial rights of similar nature,
whichever is higher;
(b) venture capital company, venture capital fund and venture capital
undertaking shall have the meanings respectively assigned to them in clause (a),
clause (b) and clause (c) of 17[Explanation] to clause (23FB) of section 10;]

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[(viii) income by way of interest received on compensation or on enhanced

compensation referred to in clause (b) of section 145A.]
The following clause (ix) shall be inserted after clause (viii) of sub-section (2) of
section 56 by the Finance (No. 2) Act, 2014 w.e.f. 1-4-2015 :
(ix) any sum of money received as an advance or otherwise in the course of
negotiations for transfer of a capital asset, if,
(a) such sum is forfeited; and
(b) the negotiations do not result in transfer of such capital asset.