When Have You to Pay Tax on Gifts Received in India?

Taxes

oi-Sunil

By Sunil Fernandes

Updated: Tuesday, November 4, 2014, 15:18 [IST]

You have to pay tax on gifts received in India, subject to many exemptions. First, let us understand when tax on gifts in exempt under the Income Tax Act.

1) If you receive any sums of money from individuals whose aggregate value is more than Rs 50,000 during the financial year, then you are liable to pay tax. Interestingly, this Rs 50,000 could be from many different sources.

b) If you have been gifted an Immovable Property without any amount being paid, then you are not liable to pay tax on it, if stamp duty value of the property is equal to or less than Rs 50,000.

But, there is a relief to the above. Here is when your Gifts will not be taxed.

1) If you receive gifts at the time of your marriage.

2) When you receive by way of Will or Inheritance.

3) Gifts received from local authorities.

4) Gift received from a relative.

5) Minor child who received gifts from parents.

How is relative defined for the purpose of paying tax on Gifts?

For the above purpose, a relative would be defined as brothers, sisters, father, mother, spouses' lineal ascendants or descendants.

Conclusion

Before receiving a gift it is extremely important to understand their tax implications. So, do check on the same and see if you are liable to pay tax.

GoodReturns.in