GIFT-TAX RULES

GIFT-TAX RULES

[Gazette of Pakistan, Extraordinary, 19th October 1963]

S. R. O. 787 (K)/63.-In exercise of the powers conferred by section 46 of the Gift-tax Act, 1963 (XIV of 1963), the Central Board of Revenue hereby makes the following rules, namely

1. Short title and commencement.-(1) These rules may be called the Gift-tax Rules.

(2) They shall be deemed to have come into force on and from the first day of July 1963.

2. Definitions.-In these rules, unless the context otherwise requires,-

(a) " the Act " means the Gift-tax Act, 1963 ;

(b) " Board " means the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 ;

(c) " Form " means a Form appended to these rules ;

(d) " Section " means a section of the Act ;

(e) " tax " means the gift-tax payable under the Act.

3. Return of gifts.-The return of gifts to be furnished by a person to the Gift-tax Officer under subsection (1) or subsection (2) of section 13 or section 14 shall be in Form I and shall be verified in the manner specified therein.

4. Assessment and notice of demand.-(1) Particulars relating to the assessment of any tax, due in consequence of an order passed under the Act, shall be drawn up in Form II.

(2) Notice of demand under section 31 shall be in Form III.

5. Appeal to Appellate Assistant Commissioner.-(1) An appeal under section 22 shall be-

(a) in Form IV, if the assessee objects to the value of his taxable gifts determined under the Act or to the amount of tax determined as payable by him under the Act or denies his liability to be assessed under the Act ;

(b) in Form V, if the assessee objects to any penalty imposed by the Gift-tax Officer under section 17 ;

(c) in Form VI, if the assessee objects to any order of the Gift-tax Officer under subsection (2) of section 20 ;

(d) in Form VII, if the assessee objects to any penalty imposed by the Gift-tax Officer under subsection (1) of section 46 of the Income-tax Act as applied under section 33 for the purpose of gift-tax.

(2) Every such appeal shall be accompanied by a copy thereof and shall be verified in the manner specified in the Form applicable thereto.

6. Appeal to Appellate Tribunal.-(1) An appeal to the Appellate Tribunal under section 23 or section 25 shall be in Form VIII and shall be verified in the manner specified therein.

(2) The appeal must be accompanied by (i) two copies thereof (ii) the original copy of the order appealed against or a certified copy thereof, together with a copy of the same, and (iii) two copies of the order of the Gift-tax Officer relating thereto.

7. Application for reference to High Court.-An application under subsection (1) of section 26 requiring the Appellate Tribunal to refer to the High Court any question of law shall be in Form IX.

8. Verification by whom to be signed.-Verification for the purposes of these rules shall be signed-

(a) in the case of an individual, by the individual himself ;

(b) in the case of a Hindu undivided family, by the manager or Karta ;

(c) in the case of company, by the principal officer ;

(d) in the case of a firm, by a partner ; and

(e) in the case of any other association by a member of the association.

9. Valuation of Property.-(1) The value of a policy of insurance shall be its cash surrender-value on the date on which the gift was made.

(2) Where the articles of association of a private company contain restrictive provisions as to the alienation of shares, the value of the shares, if not ascertainable by reference to the value of the total assets of the company shall be estimated to be what they would fetch if on the date of gift they could be sold in the open market on the terms of the purchaser being entitled to be registered as holder subject to the articles, but the fact that a special buyer would, for his own special reasons, give a higher price than the price in the open market shall be disregarded.

(3) The value of an interest in a firm or association of persons shall be determined in accordance with the following provisions, namely

(a) The excess of the market value of the asset of the firm or association over its liabilities (excluding reserves) shall be determined as on the date of gift.

(b) The excess aforesaid shall be allocated among the partners of the firm or members of the association in accordance with the agreement of partnership or association for the distribution of assets in the event of dissolution of the firm or association or in the absence of any such agreement, in the proportion in which the partners or members are entitled to share profits.

(c) The total of the amount allocated under clause (b) to each partner or member together with the capital contributed by him shall be treated as the value of his interest.

(4) The value of any other property not saleable in the open market shall be determined by the Board.

10. Qualifications of certain persons to appear as authorised representative.-Any person may, if authorised by the assessee in writing in this behalf, represent him for the purpose of section 43 provided that-------

(i) such person is an income-tax practitioner as defined in clause (iv) of subsection (2) of section 61 of the Income-tax Act, 1922 ;

(ii) he is not disqualified to represent an assessee in any income-tax proceeding by reason of any direction made under subsection (3) of section 61 of the Income-tax Act, 1922 ; and

(iii) he is not debarred from representing an assessee in any income-tax proceeding under subsection (4) of section 61 of the Income-tax Act, 1922.