Section 56(2)(viia): A Taxing Dilemma

Taxation law in India has many quirks, but one that puzzles me the most is Section 56(2)(viia). This provision was introduced in 2016 to tackle 'benami' transactions but has ended up targeting genuine transactions instead. In simple terms, if an individual receives a gift in excess of Rs 50,000 from a relative, it's subject to tax under this section. What doesn't make sense is that this gift is still exempt from tax in the hands of the donor. So, why is the receiver being taxed? In my internship, I saw a case where a person was taxed on a gift of Rs 1 lakh from his father. The father was already tax-paying, so where's the 'benami' problem? It's time to reform this provision and make it more taxpayer-friendly.