If  an individual/Huf receives from any person or persons any gift, exceeding Rs. 50000 in any previous year, as per income tax laws, the aggregate amount shall be taxable as Income From Other Sources in the hands of individual or HUF under section 56. The gift can be the following:

1.Gift Any sum of money (without Consideration) – 

if the aggregate amount of money received in any previous year is more than Rs 50,000, the entire amount received shall be taxable as income from other source

2. Gift of Any immovable property

Without Consideration: the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property shall be taxable as income from other source. Or,

 For a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration shall be taxable as income from other source.

However wef A.y 2019-20, the above provision has been amended which is as follows:

For a consideration , the stamp duty value of which exceeds  105 percent of the consideration and the difference between stamp duty and consideration exceeds Rs 50000, than the difference amount between stamp duty and consideration  shall be taxable as income from other source.

It should be noted that, that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes provided that the the amount of consideration for the said immovable property , or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property.

3. 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 shall be taxable as income from other source. Or,

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 shall be taxable as income from other source.

Gifts received From Relatives

As per the Income tax act, the sum of money received from any of your relatives are fully exempt from tax. Here the “relatives” term defines by the Income Tax act as follows :

  • Spouse of the individual
  • Brother or sister of the individual
  • Brother or sister of the spouse of the individual
  • Brother or sister of either of the parents of the individual
  • Any lineal ascendant or descendant of the individual
  • Any lineal ascendant or descendant of the spouse of the individual
  • Spouse of the person referred to in clauses (ii) to (vi).
  • In case of a Hindu undivided family, any member thereof;

For example if you are receiving sum of money of Rs.100000 from your uncle (your mother’s brother), it is fully exempt from the Tax. Whenever you get the gifts please apply the relations in the above list to ascertain whether you are liable to pay any tax for the received gift.

Gifts (sum of money) received From Non-Relatives

Here non-relatives means anyone who doesn’t come under the above mentioned relation for you. In this case you are tax exempt up to maximum of Rs.50000 for a financial year. If you receive the sum of money worth more than Rs.50000, you are liable to pay the tax on the aggregate amount (that is, total amount received). This rule applies when the gift is a sum of money, whether in cash, by way of cheque, bank draft or any articles which is value more than the Rs.50000.

For example when you are receiving a gift of Rs.1,00,000 (cheque) for the best performing in your company (not a bonus), Rs.1,00,000 shall be liable to  tax.

My mother gifted me Rs. X amount. Is this taxable?

The simple answer is “NO”. Any gift in the form of articles, shares or cash are not taxable on your hand. If you want to understand the gift related income tax laws, Under section 56 of the Income-tax Act, any money received without consideration which is exceeding Rs. 50000 is taxable on your hand. But, there is exception on certain situations.

The money is received from a relative, which includes, among others, any lineal ascendant or descendant of the individual is fully tax exempt on your hand. So, it is very clear that money received from your mother or father would be not taxable on your hand.

Another important point, if you want to claim the tax exemption on the gifts, please make sure that you have the gift deed format executed and who is gifting signed on the papers. Without that the gift laws are not valid for claiming the exemptions. You may consult a lawyer for the documentation with respect to the gift transaction.

Marriage Gifts

One very happy feature of the provision of taxation of gifts is that any gift received from any person on the occasion of the marriage of the gift’s recipient would not be liable to income tax. There is no monetary limit attached to this exemption. Note that, if you receive any gifts at the time of engagement or the marriage anniversary if liable to pay the tax.

Special Tax Exempt gifts

The following list of gifts are fully exempted from Tax whether the it is received as Cash, or any other form of the material doesn’t affect the exemption.

  1. Gift received under a Will or by way of inheritance
  2. Gift in contemplation of death of the donor; Gift from any local authority
  3. Gift from any fund or foundation or university or other educational institution or hospital or any trust or any institution referred to in Section 10(23C)
  4. Gift from any trust or institution, which is registered as a public charitable trust or institution under Section 12AA/12A
  5. on the occasion of the marriage of the individual
  6. by way of transaction not regarded as transfer underof section 47.
  7. from an individual by a trust created or established solely for the benefit of relative of the individual.

I hope this post would have given you good idea on the gift from your close relatives. If you receive any favor from your mother or father for very huge amount, it is advised to have the gift deeds to avoid any future income tax problems. If you have any questions on the gift taxes, please post it in the comments section or send a mail to xavierindia@yahoo.co.in

Regards

T.Xavier M.Com,PGIT, (ICWAI- Final)

(Republished With Amendments)

More Under Income Tax

74 Comments

  1. JUTE HOUSE says:

    MY MINOR SON RECEIVED GIFT FROM RELATIVES RS 47000/- AS ON 02.05.2018 ON BIRTH DAYS AFTER MAJORITY ON 03.05.18 HE RECEIVED GIFT FROM NON RELATIVE RS. 50,000/- .PL CONFIRM TAXABLE GIFT AMOUNT

  2. Parth says:

    Sir,
    My mother in law sell one property it’s on her name and she gift all 100% money to me and her daughter.

    She is liable for property gain tax if yes then what is step for not paying tax
    Please help

  3. Shammy Guleria says:

    I had transfer Rs. 2.5 lac in my wife’s account in FY 2018-19. I just want to know that this amount is taxable or not, or any tax ability on this amount. My wife is working but her income not more than 1.5 lac.

  4. Manoj Bhatnagar says:

    My mother purchased house in Rs. 112500 in F.Y.year 1998 & sold out in Rs. 7.0 Lakh in Dec. 2015.She gifted me entire amount with gift deed.
    I shown in my return for F.Y. 15-16 as my capital gain after indexation as Rs.526763/- and deposited in my capital gain account. Now please guide me, can I revise my IT return to show entire amount as gift from my mother and avail tax exemption or should I pay capital gain Tax.

  5. M K Singh says:

    My fathers elder brother lived with me and during his life time he always gave us cash from his pension. At times he gifted big sums to the tune of 3 lakh rupees also. He died in April 2014. At the time of his death also he was with me. After his death also we found some money. he did not have any children and our aunt was already dead. We don’t have any record of all these amount received from him . Now we want to show this amount received from him in our balance sheet. How to do so? How to document this amount received from him. Will it be taxable? My father had four brothers.

  6. Nandini Amogh says:

    My mother is gifting Rs. 20000 to me every month. She deposits this directly to my bank account. Will it be taxed for me? Should I get a gift deed done?

  7. prahlad tanwani says:

    शादी के साल, दो साल के बाद शादी के नाम पर प्राप्त हुआ उपहार क्या करमुक्त होगा ? इसकी समय सीमा कितनी है ?

  8. smriti gupta says:

    My friend from USA wants to give me 100000/-rs to me becoz i have open a NGO which is registered but not have 80g.He wants to help me for purchase of 4 computer for my NGO. How can i show it becoz he will send it to my account becoze we don’t have fcra.and he is USA citizen. pls help me.

  9. Radhakrishnan Nair says:

    amount as gift from relative sent to mothers account for daughters marriage is taxable or not.Is there any limit for the amount?

  10. Prakash says:

    Hi,

    I am planning to gift 15L to my father and then he is going to invest this amount into stocks and mutual funds. Is there any tax implications or this will attract clubbing of profit in my income?

  11. sandesh says:

    Hi,

    I have given Rs. 6 lacks in cash to my mother-in-law last year. Do she need to pay the income tax? If No, since she is not income tax Assesse and does not have PAN, do she need to file the return?

  12. Piyush says:

    Hello, My Wedding date is Dec’13 however I have cash deposits in my account in FY 14-15 for which I have received scrutiny. Can you please guide for amount (less than 30 Lacs) can I claim this as marriage gift.

  13. Himanshi Beriwala says:

    Gift Received from Father 18 Lac Via Account Payee Cheque. Do we have to report anywhere in income tax return filed? Or anywhere? Please suggest ?

  14. Buddhadeb Das says:

    If any amount of gift e.g. Rs14 lac being received from father in law ,has any liability raised for such transaction either receiver or giver.The Giver is a very Senior Citizen ,ill health and such gift is made to daughter in law for her betterment in the near future.Please let me mail at the earliest.

  15. Rema says:

    Sir,
    I would like to transfer a gift amount of 8 lakhs to my father from my nre account..SBI. how do i do it? What should I do for it? I dont have any income here in India and have not been filing ITR since I was an NRE… Will my father be taxed? he is 76 yr. old. He has a local account in SBI itself… Kindly reply.

    Rema

    1. Ca Lalit Sethia says:

      No, Its not taxable.
      In order to be on safer side you can execute a gift deed from a lawyer that you have received a cash gift from your father.

  16. anup says:

    1). can my mother gift Rs 1 lacs to my wife and it will free from tax ambit both for my wife as well as for my mother ie it will not be taxable in both hands

    2). can my father gift shares to my wife and it will free from tax ambit both for my wife as well as for my father ie it will not be taxable in both hands.

    pls revert urgently

  17. anil says:

    Sir,
    if i give 50000 cheque to my friens as a gift…and in future if income tax department ask to me why have to give gift to your friend of 50000 so what can i said that due to love and affection. …

  18. Chetan Mahadik says:

    Sir,

    I have gifted Rs. 16Lac to my sister, by way of bank transfered. Can this amount taxable in hands of my sister (can any tax liability generat for my sister). & How should I show this gift in my & my sister income tax return?

    kindly advice me.

    Thanks & Regards
    Chetan

  19. Arvind says:

    Sir, how to show amount of gift in ITR form which i given to my parents in FY 2014-15.. please reply me as its much important for me. Thanks in advance.

  20. Kaushik says:

    hello sir
    i want to know that whether my sister’s husband can gift me other than cash ( mean in kind e.g. mobile or laptop worth more than Rs.50000 ) liable for tax or not ? please guide me

    And is there any difference in case of individual my HUF receives such gift..??

  21. RAJEEV says:

    is any gift scheme organized by a firm to take gift of sum of small amount from non relative person in term of bank draft and take them back as a draft in term of gift should be registered with any authority or they did really fall under gift definition?

    I think not because doing such activities are subject to financial schemes. and should be registers under stat authority as per RBI guidelines is it right.

  22. ashit shah says:

    i want to know whether my mami can gift me a cheque gift of high value without me having to pay any tax on it? which documents to take from mami for my safety in case of income tax scrutiny in the future?

    ashit shah
    09820559243

  23. rama says:

    property Gift to brother’s son- is it taxable and if so by whom?

    can help rendered at emotionally crucial times requiring psychiatric help over a period of ten years be considered as consideration?

  24. SAIYAM PARIKH says:

    Does the grandmother’s real sister of the spouse of assessee comes under the ambit of relatives for gift related provisions and if yes then the amount so given as gift would be taxable or exempt.

  25. Abhishek says:

    Does the grandmother’s real sister of the spouse of assessee comes under the ambit of relatives for gift related provisions and if yes then the amount so given as gift would be taxable or exempt.Please reply as fast as possible..

  26. Sanjay C. Mehta says:

    If my Brorherinlaw (Husband of my sister) gift me Rs. 4,00,000/-
    by Account payee CHEQUE
    Please, let me know this amiunt
    TAXABLE OR NON TAXABLE FOR ME ?

  27. siddharth says:

    Hi
    My company (a non-relative) gives me a 10gms gold coin on occasion of my completion of 20 years of service…
    now can this be considered a gift?
    what will be the implications on company? (i think co has two options – either show it as gift, or, salary,,… if it shows as gift, will it be tax deductible?)

  28. Dhvani says:

    Whether gift given by a mother in law to her daughter in law will be taxable? As and above mother in law does not cross the basic amount liable to tax?

  29. RAJ GOPAL SRIVASTAVA says:

    i have received cash gift of rupees 5 lac from my father through cheque which is tax free. If it is to be shown as exempt income in itr2 in ay 2014-15?

    Raj Gopal Srivastava

  30. Bhavesh says:

    Hi,

    What will be the tax liability to my mature son if I gift him a sum of Rs. 10,00,000/- through bank transaction and then he invests in FD and get interest of Rs. 80,000/-. Please note, he is a student and has no other source of income.
    What will be his total income for the year?
    How should I show this gift in my income tax return?

  31. mahender says:

    as my brother is giving Rs5000monthally to my mother
    can it be shown as gift in income tax return ?

    these transactions happen in cash without any deed or document proof so how can be it proofed as gift or these transactions has done towards my mother?

    is my brother also needed to show in his ITR that he has given this amount as gift towards mother?

  32. Mohan says:

    After reading all above. some question emerged which i need to clarify.
    1) gift to relative is it taxable in hands of donor.
    2) gift more than rs 50000 in taxable in hands of receiver subject to provision of sec 56. but what if some is less than rs 50000 is donor taxable.

  33. Ashutosh says:

    Sir,
    My own Brother has gifted me cash 700000/ by transferring into my account from his NRE account thro’ RTGS in 27 dec 2011. Now is it taxable? till when should I file ITR and which form? Also do a jobless psychiatric patient get any benefit in Tax if his sole Income is from Interest of FD in banks?

    With Regds.

  34. Sri Bharath says:

    Dear Mr.Xavier

    Thanks for this article.
    My grandmother has some money in her bank a/c and she wants to gift to my mother by giving a cheque and executing the gift deed. From ur article i understand that my mother does not have to pay any income taxes on the amount received as gift and she is free to use it in her will. Also is there any tax liability for my grandmother for giving the money.

    Appreciate your guidance

    -Sri Bharath

  35. Soumik Chakraborty says:

    To correct you a bit, in the example of recieving share worth Rs 1,00,000 the entire 1,00,000 is taxable in the hands of recipient once AGGREGATE limit of 50,000 is breached as per section 56(2)(vii).
    Gift recieved by parents brother/sister(maternal/paternal uncle/aunty) from parents children(Nephew/niece) is taxable in the hands of recipient.

  36. sudhin bathija says:

    I would seek clarification on no gift tax when received from brother or sister of either parent as there is some doubt,.
    Thanking you,
    Regards,
    Sudhin

  37. CA Lukesh Sethi says:

    Dear Sir

    I have read your article in this you have mentioned ” If you receive the gift worth more than Rs.50000, you are liable to pay the tax whatever you received excess of the limit. This rule applies when the gift is a sum of money, whether in cash, by way of cheque, bank draft or any articles which is value more than the Rs.50000.”

    But as per Section 56(2)(iv) of the income tax act “where any sum of money, the aggregate value of which exceeds fifty thousand rupees, is received without consideration, by an individual or a Hindu undivided family, in any previous year from any person or persons on or after the 1st day of April, 2006 94[but before the 1st day of October, 2009], the whole of the aggregate value of such sum shall be taxable in the hands of taxpayer in case of gifts received from Non Relatives.”

    So Please clarify on this point whether whole amount of gift will be taxable or excess amount exceeding Rs. 50000/- will be taxable.

    Looking forward your reply.

    Regds

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