Know how Gifts received by an individual or HUF are taxed…FAQs

 

 

If the following conditions are satisfied then any sum of money received by an individual/ HUF will be charged to tax:

    • Sum of money received without consideration.
    • The aggregate value of such sum of money received during the year exceeds Rs. 50,000.

Following persons would be considered as relative ​

(a) Spouse of the individual;

(b) Brother or sister of the individual;

(c) Brother or sister of the spouse of the individual;

(d) Brother or sister of either of the parents of the individual;

(e) Any lineal ascendant or descendent of the individual;

(f) Any lineal ascendant or descendent of the spouse of the individual;

(g) Spouse of the persons referred to in (b) to (f).​

Gift received only on the occasion of marriage of the individual is not charged to tax. Apart from marriage there is no other occasion in which gift received by an individual is not charged to tax. Hence, gift received on occasions like birthday, anniversary, etc. will be charged to tax.​​

Friend is not a relative as defined in the list and hence, gift received from friends will be charged to tax.

whether received from India or abroad will be charged to tax if exceeds Rs. 50,000.​​

If the aggregate value of gifts received during the year exceeds Rs. 50,000, then aggregate value of such gifts received during the year will be charged to tax.​

Once the aggregate value of monetary gift received during the year exceeds Rs. 50,000, then the aggregate value of gift received during the year will be charged to tax.​

If the following conditions are satisfied then immovable property received by an individual or HUF will be charged to tax (*):

  • Immovable property, being land or building or both, is received by an individual/HUF.
  • The immovable property is received without consideration (i.e., received as a gift) or for a consideration which is less than the stamp duty value of the property by an amount exceeding Rs.50,000.
  • The immovable property is a ‘capital asset’ within the meaning of section 2(14)​​ for such as individual or HUF.
  • The stamp duty value of such immovable property received without consideration exceeds Rs. 50,000.

In the following few cases gift of immovable property will not be charged to tax.

  • Property received from relatives.
  • Property received by a HUF from its members.
  • Property received on the occasion of the marriage of the individual.
  • Property received under will/ by way of inheritance.
  • Property received in contemplation of death of the donor.

Yes, Friend is not a relative as defined in the above list and hence, gift received from friends will be charged to tax.

If the following conditions are satisfied then value prescribed for movable property (*) received by an individual or HUF will be charged to tax​:

  • Prescribed movable property is received without consideration (i.e., received as gift).
  • The aggregate fair market value of such property received by the taxpayer during the year exceeds Rs. 50,000In above case, the fair market value of the prescribed movable property will be treated as income of the receiver.

(*) Prescribed movable property means shares/securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art and bullion, being capital asset of the taxpayer.

If the aggregate fair market value of prescribed movable property received by an individual or HUF without consideration during the year exceeds Rs. 50,000, then the total value of such properties received during the year without consideration will be charged to tax. In this case the total value of jewellery received during the year exceeds Rs. 50,000 and hence, Rs. 84,000 will be charged to tax.​

Source:- http://www.incometaxindia.gov.in

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