- CA Sandeep Kanoi
- | Income Tax - Articles
- 10 May 2020
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- 1 comment
Gifts!! This word always brings smile not only on face of children but also the elder once. But at the same time we should keep in mind the tax implication on gifts. Hence today I am covering this topic in detail.
Page Contents
Type of gifts and its taxation is as under:
1. Cash:
If aggregate value is less than Rs.50000 than nothing will be taxable. If value exceeds Rs. 50,000, the whole amount will be taxable.
2. Movable Property as Gift:
a) Without consideration:
Where any person receives, in any previous year, from any person or persons any property other than immovable property without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property will be taxable in the hands of receiver.
b) For Inadequate Consideration:
Where any person receives, in any previous year, from any person or persons any property other than immovable property for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration.
The excess differential amount will be taxable in the hands of receiver.
3. Immovable Property as Gift:
a) Without Consideration:
Where any person receives, in any previous year, from any person or persons any immovable property without consideration and the stamp duty value of which exceeds fifty thousand rupees then in such case, the stamp duty value of such property will be taxable in the hands of receiver.
b) For Inadequate Consideration:
Where any person receives, in any previous year, from any person or persons any immovable property for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts:
(i) the amount of fifty thousand rupees; and
(ii) the amount equal to five per cent of the consideration
The excess differential amount will be taxable in the hands of receiver.
4. Some Exempt gifts
If any gifts are received in following situations or from below mentioned people then those gifts will be fully exempt under Income Tax.
Any sum of money or any property received:
- from any relative; or
- on the occasion of the marriage of the individual; or
- under a will or by way of inheritance; or
- in contemplation of death of the payer or donor or
- from any local authority or
- from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or
- from or by any trust or institution registered under section 12A or section 12AA; or
- by any fund or trust or institution or any university or other educational institution or any hospital or other medical institution or
- by way of transaction not regarded as transfer under clause (i) or clause (iv) or clause (v) or clause (vi) or clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb) or clause (vid) or clause (vii) of section 47; or
- from an individual by a trust created or established solely for the benefit of relative of the individual.
- any compensation or other payment, due to or received by any person, by whatever name called, in connection with the termination of his employment or the modification of the terms and conditions relating thereto
Note: In the above-mentioned points the term Relatives means
– Spouse of Individual
– Brother & Sister of Individual
– Brother & Sister of Spouse of Individual
– Brother & Sister of either of the parents of Individual
– Any Lineal ascendants or descendants of the individual
-Any Lineal ascendants or descendants of the spouse of the individual.
Republished with Amendments
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no limit
sir my brother has gifted me some huge cash as a gift and he is working in gulf since 20 years and let me know is this amount exempted or taxable
upto what extent the gifts received from relatives is exempted from tax
very helpful and thanks
Thanks for provding information about Gift Tax. I appreciate for posting such articles
what is the tax liability of the giver when he gift immovable asset?
Bipin…………….in excess of 50K, hence it only on 1 K but not on full 51K.
sanjay…………….both receiver and giver are exsempted.
yes varadarajan.parents are relaties (so far it relates gift tax defeition)
vswami….in contemplation of death of donor.
i agree with your views . but the issue may be to reduce litigations since will/inheritance acts cab be debated to a greater extent. this may be added to benefit like kidney donation etc. such views. that is what my perception
dear premkumar ji…this is a comprehensive article. one cannot cover total aspects in one law. we are seeing that legal battles are innumerable despite the bills and acts are written by experts because interpretation is difficult on every matter. it calls for greater vision. let’s give pat rather than ask him to keep silent. hope u now agree. thanks in anticipation
I SUGGEST THAT BOTH CASH AND KIND (EG. IMMOVABLES) MAY BE DEALT THOUGH THE LATTER HAS WIDER RAMNIFICATIONS.(SELF ACQUIRED ETC.)
Is this article is updated one after considering the amendments made under income tax act, 1961 on 01.04.2014 u/s 56?
very useful information
sir when i got 51000 gift tax liability on 51000-50000=1000 or full amount 51000
Very useful Information on Gift.
Receipt of Gift are exempted .But what about who gives Gift?
Besides what has been stated if gift is done which finds no mention in definition of gift is also exempt according to me. For example of one gifts painting it would br chrarged to tax if FMV exceeds rs50000/-, however if one gifts car then it is not taxable as it not property. Therefore we hear news that normally celebirities gift expensive car. Latest was salman receiving car worth 3cr on success of dabang from his brother.
SIR
PLEASE SEND THE KNOWLEDGE,HOW TO FILL ITR OF INDIVIDUAL E RETURN.
thanx for such useful information
Thank you for providing useful data about gift receipts and its tax implications.
If the gifts are received from Parents, will it fall under the classification of “lineal ascendant of the individual”?
One aspect made a mention of but left to be covered is on gifts from non-relative NRIs.That is an area requiring to be studied in-depth and useful guidance provided.
Exemption covers “Gift in contemplation of death of the donor;”. It is recalled that it has not been free from controversy / doubt but for obvious reasons has given rise to a dispute in construing/on the legal construction of rather the dicey phrase – “in contemplation of death” of the donor. As such, in order to avoid /obviate, in one’s perspective, “Gift received under a Will or by way of inheritance” might prove a safer bet, for qualifying for exemption.
Any contra view ?
Dear Xpert Consulting
gift in kind is Taxable , you must be clear in subject before posting an Article. as your Articles are mostly read by non professionals. Please provide them proper information , if not keep silent
Thanks for your effert
As per provisions of sec 56(2)Gifts received from non relatives of property is taxable from october 1,2009. Please clarify the same
information you’ve provided is really a useful one.thanks a lot.
Sir, You have made the article referring to old provision of section 56(2)(vi) which stands revoked and from 01.10.2009 section 56(2)(vii) is in force wherein immovable assets have also been subjected to tax. PLEASE DO THOROUGH RESEARCH BEFORE POSTING SUCH ARTICLES.
good information