Are wedding gifts taxable?

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Are wedding gifts taxable?
Remember, if you receive gifts whose value is in excess of Rs 50,000, it is taxable, unless they are given by specified relatives under the IT Act.

If you have just got married and received large amounts by way of cash from friends and relatives, then relax, it's not taxable. Gifts received by way of cash during marriages are also exempt, no matter who gives the same. So, say your father has decided to give Rs 10 lakhs for you in cash for your wedding, then this amount is exempt from income tax.

The norm these days is to give in cash at weddings, which, if taxable would have added to the misery of the married couple. Now, the question is: does the gift have to be given on the marriage date itself? There is no answer to this, as the provisions are unclear on the same. I think logic should apply in this case. For example, there could be a delay in receiving the gift on the exact marriage date, or some might chose to give it earlier.

There is no guarantee that the remittance received from a relative living abroad, will arrive on the exact date of the marriage.

Gifts that are taxable

On October 1, 2009, the Central Board of Direct Taxes (CBDT) put into effect that people receiving gifts, in cash or kind, will have to pay tax, if the value exceeds Rs 50,000. Prior to this, the income tax was levied only on cash gifts of this amount.

Gifts received from the following are tax exempt

a. Your spouse;
b. Your brothers and sisters and their spouses;
c. Your spouse's brothers and sisters and their spouses;
d. Brother and sister of your parents and their spouses;
e. Any lineal ascendant (parents, grandparents, children, grandchildren) or descendants (children, grandchildren);
f. Any lineal ascendant (parents, grandparents, children, grandchildren) or descendant of your spouse (children, grandchildren)

Read more about: taxes, taxes on wedding gift
Story first published: Friday, May 24, 2013, 9:28 [IST]
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