Generally, when the gift is of lesser value, no tax is levied on it, but when it comes to expensive gifts, tax may have to be paid on the gift received.
New Delhi. The festival of Diwali is about to come in a few days. This festival is celebrated with great pomp all over the country. During this, many friends and relatives also give gifts. Sometimes these gifts are given in cash and sometimes in the form of a commodity. Generally, when the gift is of lesser value, no tax is levied on it, but when it comes to expensive gifts, tax may have to be paid on the gift received.
Gifts received from relatives are tax free under Section 56 of the Income Tax Act. If the value of any type of gift received on Diwali from any close relative such as husband, wife, brother, sister or husband or wife’s parents, siblings, if the value does not exceed 50 thousand rupees, then no tax on it. Seems like. This means that a gift above Rs 50,000 and received by a person other than your relative is taxable.
When is tax not due?
No tax is levied on any type of gift received from relatives, gift under a will or inheritance or any gift received in marriage. However, gifts received from anyone other than relatives are taxable only if the market value of such gift exceeds Rs 50,000. If the value of the gift is less than 50 thousand then no tax is levied. Further, when an immovable asset is disposed of under a trust, it is also exempted from taxation. The gift tax was abolished many years ago.
When is tax due?
If the stamp duty value of gifts received in the form of immovable property from anyone other than relatives exceeds Rs 50,000, then it is liable to tax. Further, a property gift which is received from another person after paying some sum and such amount is less than the stamp duty value of the same property by an amount exceeding Rs 50,000, then the difference between the stamp duty value of the property and such amount The difference will be taxed.
