Taxability of gifts in India

Introduction

Exchanging gifts is an excellent way of showing love and gratitude towards people. We send and receive gifts several times in a year. Since gifts have an impact on your tax situation, it is important for you to understand the taxability of gifts in India. We have prepared a quick reference here that will help you understand which gifts are chargeable or exempt from taxes.

Taxability of gifts in India
Summary

So now you know how gifts affect your tax profile. Here are some key things to remember:

1) Gifts under Income Tax Act are:
  a)Cash    b) Movable property    c) Immovable property

2) Some gifts are exempt from tax for the receiver:
  a) Cash/kind below Rs. 50,000
  b) Gifts from relatives
  c) Gifts received in marriage

3) Relatives under Income Tax Act:
  a) Spouse of individual
  b) Brother and sister of individual
  c) Brother and sister of spouse of individual
  d) Brother and sister of either of the parents of individual
  e) Any lineal ascendants or descendants of the individual
  f) Any lineal ascendants or descendants of the spouse of the individual

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