According to reports from Mint, any gifts received in cash, movable property, or immovable property that exceed ₹50,000 are fully taxable in the hands of the recipient. For example, if you receive a gift worth ₹80,000 in a tax year, you are required to pay tax on the full amount. However, gifts below this threshold are not taxable. The tax-free limit for gifts from friends is ₹50,000 per year, meaning if you receive two gifts worth ₹30,000 each, you would be taxed on ₹10,000 as you have breached the exemption limit.
As reported by Mint, wedding gifts are tax-exempted under Section 56(2)(x) of the Income-tax Act. However, there is a complete constraint on accepting any amount in excess of ₹2 lakh in cash on a single day. While there are no specific rules requiring gifts to be received on the wedding day, it is advised that such gifts should be handed over within a reasonable period, such as six months between engagement and wedding. Income arising from gifts from close relatives remains taxable.
According to Mint reports, if a gift is received from an employer in the form of gift vouchers or tokens on festive occasions like Diwali that exceeds ₹5,000, it is considered part of your salary and taxed as per your tax slab. However, if the employer presents cash gifts, there is no tax exemption. In cases where employers present gift vouchers or tokens, the entire amount is taxable as salary income.
As reported by Mint, immovable property received without monetary consideration usually needs to be registered and taxes are expected to be paid in certain cases. The recipient is required to pay income tax if the stamp duty value or circle rate of the property exceeds ₹50,000. Additionally, if the property is purchased for a price lower than its stamp duty value by more than ₹50,000 or 5% of the consideration—whichever is higher—the excess amount is treated as taxable income in the year of receipt. Movable assets such as jewellery, archaeological collections, drawings, paintings, sculptures, and other works of art are also subject to tax if their fair market value exceeds ₹50,000.
According to Mint reports, when transferring movable or immovable property as gifts, a gift deed must be prepared to record the act. The deed should mention that the gifting process was a voluntary action made without any kind of coercion. It is always crucial to maintain records of gifts and documentation of assets received as gifts in the form of gifts received. This documentation becomes essential for tax compliance and future reference.
