- If the value of the gifts you receive in a financial year is more than Rs 50,000, it is taxable
- It doesn’t matter if the gift is in cash or kind
- It will be filed under “Income from other sources”
- Gifts of immovable assets such as land and buildings are also taxable
- The government specified stamp duty value is used to determine the value
- Only specified moveable assets are taxable: shares, securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, and bullion.
- Virtual digital assets such as crypto and its various avatars are also taxable
- In case of these assets, their market rate is used to determine the value.
- If you get something for less than its value, then the difference in amount is taxable as “gift”
Calculating the taxable amount
Say you get a gift from friend A that’s valued at Rs 30,000 and another from friend B that’s worth Rs 25,000. 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
Exemptions
- No tax on gifts you receive for your wedding
- Doesn’t matter who is gifting
- Even gifts received during the run-up to the wedding and a few days later are exempt
- Gifts given between family is not taxable
- Every possible relation is accomodated
- This includes: 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
- Gifts inherited or received through a will are not taxable
- Gifts received from approved funds, hospitals, trusts, or institutions are also non-taxable
- Some moveable assets are non-taxable. These include smartphones, Xbox, car.
- Customary gifts such as sweets and chocolates are also exempted