Gift under income tax
Gifts received are taxable income under the terms of the Income Tax Act. However, donations were exempt from income tax until the fiscal year 2003–2004.
Gifts are now taxable according to a 2004 amendment to the Income Tax Act. Now, any money received by an individual or HUF in cash or on credit from an unrelated person within a fiscal year would be counted as income.
Let’s look at how the gifts you received are taxed.
gift from parents taxable?
the gifts from family members like the spouse, brothers and sisters (and their spouses) of the person, the person’s spouse, and the person’s parents, Individuals and their spouses’ lineal ancestors and descendants (and their spouses) are not taxed.
Gifts given during a marriage
The individual is not taxed on the gifts they received throughout their marriage.
Inheritance Willing to carry out
Money obtained through an inheritance or will is not subject to income tax. Any movable or immovable assets inherited as a result of a relative’s passing won’t be subject to income tax as a result.
Money Received While Thinking About Death
Similar to inheritance, cash received in advance of a person’s passing or that of a member of a Hindu undivided family (Karta) is not subject to income tax.
Gifts from friends
Gifts from friends will incur charges, but gifts from family members won’t be subject to taxes.
Transfers of money or gifts that have tax repercussions for the donor
The recipient is responsible for paying taxes on the gift’s or asset’s value.
foreign gifts received.
If a person receives presents worth more than 50,000 in a year, whether they are from India or outside, they will be charged.
People must assess their transactions to see if any of the aforementioned taxable scenarios apply. If they replied in the affirmative, they must voluntarily disclose the income in their individual income tax filings in order to be in compliance.