Income Tax On Gifts- Whether or not income tax will have to be paid on gifts received on a festival or a special occasion, it depends on the value of the gift and from whom the gift is received. Gifts received from blood related relatives are tax free.
new Delhi. Income Tax on Gift: Do you know that if your sister-in-law is giving you a gift, then tax will not be levied on it, while the friend has given it, then tax will have to be paid. After all, how does this rule of the Income Tax Department regarding gifts work? People have a lot of misconceptions about this. Today we are giving you complete information by removing all those misconceptions.
As you know, in our country, the transaction of gifts on special occasions like festivals and New Year is very common. This year also people would have received gifts on Christmas and New Year. The Income Tax Department keeps an eye on these gifts as well and imposes tax on them.
As per section 56(2) of the Income Tax Act, gifts received in a financial year are chargeable to tax as “Income from other sources” as per the slab rate. That’s why while taking and giving a gift from a person, one must think about the tax. According to the Income Tax Act, some selected gifts may attract tax. But the tax depends on the value of the gift and who has given it to you. If the gift received does not come under the exempted category, then you will have to declare it in your Income Tax Return (ITR).
Tax exemption on gifts received from them
Gifts received from relatives are tax free under Section 56 of the Income Tax Act. Husband, wife, brothers, sisters, brothers and sisters of husband and wife i.e. brother-in-law and sister-in-law, siblings of parents i.e. maternal uncle and uncle, people with whom there is blood relation, or husband and wife who have blood relation, they are relatives fall into the category. There is no tax on any kind of gift received from these people. But, friends do not come under the category of relatives and gifts received from them are taxable.
Will have to pay tax on these
Under the Income Tax Act, property worth more than Rs 50,000 such as shares and securities, jewelry, property, archaeological collections, paintings, paintings, sculptures and art or bullion etc. is taxed if received as a gift. This will be taxed as income from other sources. The recipient of the gift has to pay tax as per his existing tax slab.
