Tax on Gifts in India FY 2024-25: If you are going to give or receive expensive gifts, then you should be aware of the income tax rules.
Everyone is happy to receive gifts. Along with this, the concern about tax also increases. Imagine, how happy you will be if a friend or relative gives you an expensive gift.. isn’t it? But do you know that you may also have to pay tax on such gifts (Gift Tax in India)? Yes, the government has made some changes in the rules of gift tax, which is going to directly affect your pocket.
This will affect those people more who often give or take expensive gifts. If you are going to give or take gifts, then you should be aware of the income tax rules. So let’s know…
Give information about the income from gifts while filing ITR
Under the gift tax rules, you will have to pay tax on some gifts. In India, gifts are considered as income from other sources and can be taxed under the Income Tax Act, 1961. However, taxpayers have to give details of all these gifts while filing returns (ITR).
Gifts up to Rs 50,000 are tax-free
According to the rules, gifts up to Rs 50,000 are tax-free. This means that if you receive a gift of more than Rs 50,000 from any one person in a year, then you will have to pay tax on the amount that exceeds Rs 50,000.
Which gifts will be taxed?
- If you receive a gift of more than Rs 50,000 from any one person in a year, then you will have to pay tax on the amount that exceeds Rs 50,000.
- If you receive a gift from a distant relative or friend, then it will be considered taxable.
- If you receive a gift for advertising or promotion, then its value will be included in your income and will be taxed.
Which gifts are not taxable?
- Gifts received from family relations such as spouse, parents, siblings, grandparents and children are not taxable, irrespective of their value.
- Gifts received on special occasions like marriage or religious functions are exempted up to Rs 3 lakh.
- Gifts honoured by the President, Vice President, Governor or the Government are also tax-free.
