If the value of gifts you receive in a financial year is more than Rs 50,000 (~US$600), there are tax implications. Whether that gift is in cash or kind.
If that limit has been crossed, you have to include these gifts under ‘income from other sources’ in your tax filings and pay tax on them.
Say you get a gift from friend A that’s valued at Rs 30,000 (~US360)andanotherfromfriendBthat’sworthRs25,000(US300). Even though the individual value of these gifts is below Rs 50,000, you still have to pay tax on the entire Rs 55,000 (US$670)
There’s no tax on gifts you receive for your wedding. Whether that’s from relatives or someone unrelated. Even gifts received during the run-up to the wedding and a few days later are exempt from tax.
taxman doesn’t poke his nose into gifts given between family members. Any such gift, however big, does not attract tax.
As we all know, Indian families tend to be quite big with scores of relatives. And they are all accommodated under the tax tent—parents, grandparents, brothers, sisters, grand-children, and, of course, spouses. So are the parents, brothers, and sisters of your spouse, and the brothers and sisters of your parents. And the spouses of all the persons mentioned above.
If you inherit gifts or get them through a will, there’s no tax on it
Gifts received from approved funds, hospitals, trusts, or institutions are also outside the tax net.
you have to pay tax on gifts of immovable assets such as land and buildings,
only specified moveable assets are covered—such as shares and securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art, and bullion. Virtual digital assets, that is, crypto and its various avatars
new smartphone, Xbox, or even a car as a gift, there’s no tax on it. And of course, there’s no tax on customary gifts like sweets and chocolates.
if specified moveable properties such as jewellery or stocks are received as gifts, their value is determined based on the market rate. In the case of immovable properties such as land and buildings, the government-determined stamp duty value is the yardstick.
If you get something for less than its value, that’s also considered a gift for tax purposes.
if your friend gives you a gold chain worth Rs 2 lakh (~US2,500)andyoupaythemRs1.25lakh(US1,500), you’ll need to pay tax on the entire difference of Rs 75,000 (US$900) because it’s above the prescribed limit.
