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The Gift-Tax Act, 1958

45. Act not to apply in certain cases.

The provisions of this Act shall not apply to gifts made by

  1. a Government company as defined in section 617 of the Companies Act, 1956; (1 of 1956.)

  2. a corporation established by a Central, State or Provincial Act ;

  3. 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;

  1. 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) any company [other than a company to which clause (c) or clause (d) applies] to an, Indian company in a scheme of amalgamation;]

  2. any institution or fund the income whereof is exempt from income-tax under 5[section 11 or section 12] of the Income-tax Act.

3[Explanation 1].-For the purpose of computing the number of six persons referred to in the proviso to clause (c), persons who are related to one another as husband and wife, brother and sister, brothers, sisters or who are lineal descendants or ascendants of one another and persons who are nominees of any other person together with that other person shall be treated as a single person.

4 [Explanation 2.-For the purpose of clause (d a), the term "amalgamation " shall have the meaning assigned to it in clause (1A) of section 2 of the Income-tax Act.]

  1. Ins. by Act 20 of 1967, s. 35 ((w.e.f. 1-4-1967).

  2. Subs. 4by Act 53 of 1962, s. 35, for clause (i) of sub-section(3) of section (w.e.f. 1-4-1963).
  3. Explanation renumbered as Explanation 1 by Act 20 of 1967, s.35 (w,e.f, 1-4-1967).
  4. Ins. by s. 35, ibid. (w.e.f. 1-4-1967).
  5. Subs. by Act 16 of 1972, s. 55 (w.e.f. 1.4.1973).

888N1[Explanation 3.-For the removal of doubts, it is hereby declared that the exemption admissible under clause (e) in relation to gifts made by an institution or fund referred to in that clause shall not be denied merely on either or both of the following grounds, namely-

  1. that, subsequent to the gift, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of 3[section 11 or section 12 or section 12A] of the Income-tax Act ;
  2. that, under clause (c) of sub-section (1) of section 13 of the Income-tax Act, the exemption under
    3[section 11 or section 12 ] of that Act is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 of the said Act where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent. of the capital of that concern.]

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