Is tax applicable on gift?

1) Gifts up to Rs 50,000 in a financial year are exempt from tax. However if you receive gifts higher than this amount, the entire gift becomes taxable. For example, if you receive Rs 75,000 as a gift from your friend, the entire amount of Rs 75,000 would be added to your income and taxed at your slab rate.

Who can give gift as per income tax?

Gifts exempt from tax Gifts received from relatives are exempt from tax. by virtue of Section 56 of the Income Tax Act.

How are gifts received by an individual taxed?

In this article, we will emphasis on the applicability of income tax laws on the gifts (movable or immovable) received by an individual from any person. Income tax laws bifurcates gifts received by an individual in three broad categories namely Gift of money (cash/ cheque etc), Gift of movable property and Gift of Immovable property.

Who is not taxed on a gift from a relative?

Gift from relatives are not taxable under the Income Tax Act. As per the Income Tax Act, the following list of persons are defined as a relative of an individual. Hence, only money received from the following persons will be exempt from income tax for an individual taxpayer. Spouse of the individual. Brother or sister of the individual.

Do you have to pay tax on a gift from a friend?

Friends do not fall under the definition of relative as per Income Tax Act. Thus, gift received from friends will be charged to tax if it exceeds the threshold. Gifts received from relatives is not taxable and there is no limit on the amount of money that can be received as gift from relative that is not chargeable to income.

Can a HUF gift be exempt from tax?

In case of HUF gift received from any of the member of the HUF is exempt from Income Tax. Money and gifts received by an individual taxpayer on the occasion of his/her marriage is exempt from income tax. Money received by way of Will or by way of inheritance is exempt from income tax.