Giving gifts is common on occasions like weddings and birthdays. Apart from this, not only sweets, but also some expensive gifts like gold and silver are also being given to relatives and friends on festivals like Diwali, Dhanteras. Some people give large sums of money or expensive gifts to family members for the purpose of saving income tax. But this will save tax only, it is not necessary. In fact, there are provisions for clubbing of income in the Income Tax Act. As a result, some gifts become taxable. That is why many people have come under the target of the Income Tax Department knowingly or unknowingly in such cases. Obviously, in the current festive season, you would like to avoid such stress. Let's know the nuances of gift tax.

3 Do all gifts have to be taxed?

Not all gifts are taxable. If a person has received gifts of value more than Rs 50,000 in a financial year from people who are not his relatives, then only he will be taxed. This rule is also applicable to gifts received abroad by an Indian resident.

Gift tax-free up to the limit of 1 50 thousand

Gifts such as cash, cheques, demand drafts, jewellery, electronics or paintings are taxed when the total value of gifts received in a financial year exceeds Rs 50,000. That is, if you have received more gifts than this, then it will be added to your taxable income.

4 Gifts received from relatives are tax-free 

Gifts from close relatives like husband, wife, siblings are tax-free. But tax is not levied. But if someone has given a gift to wife, minor child or son bride. The income from such property will be added to the income of the giver and tax will be payable to the giver of the gift.

2 Tax Provisions on Employer's Gift 

If your employer gives a gift of more than Rs 5,000, then you will have to pay tax on it as income from salary. The higher the value of the gift than 5,000, it will be considered as your income. The cash gifted to the employee from the employer has to be taxed.

When is a gift received by someone not taxed?

1. Gifts received on the occasion of marriage 2. Ancestral property received through Will, Inheritance is tax-free. 3. Amount received from foundation, university, hospital or institution specified in section 12AA is tax free.