Income Tax Rule on Gift: On every happy occasion, people give gifts to each other. There remains a confusion among the people regarding the taxability of these gifts. When the husband and wife give gifts to each other or when gifts are given to their family members, there is a question in the mind regarding taxation. The Income Tax Department (IT) has made some rules regarding this. The IT department has made certain rules regarding taxation of gifts received by an individual or Joint Hindu Family. According to the circular of the IT department, gift is considered as money received without any consideration or any movable or immovable property.
Tax is applicable on gifts above Rs 50,000.
By the way, movable and immovable property which is available at a rate less than the market price, also comes in this category. Any gift exceeding Rs 50,000 in a financial year is subject to tax. If a gift is given by a person to his family, even if its value is more than Rs. 50,000, then in such a situation there will be no tax.
Who can be a relative as per IT department
- If husband and wife gift each other, then no tax is levied on it.
- There will be no tax if brother or sister gifts to each other.
- No tax will be charged if the gift is made by the brother or sister of the husband or wife.
- If a descendant of husband and wife also gives something as a gift, then no tax is levied on it.
Not only this, according to the IT department, the gifts received on the occasion of marriage will not be taxed. If you have received such a gift which does not come under tax, but if income is coming on it, then it will come under tax.
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