In India, exchanging gifts is very common, whether for a wedding, a birthday celebration, or other festivities. It’s seen as a symbol of love and affection and a symbol of social status. Gifts of any form, such as cash, checks, demand draft, and so on, are taxable under the Gift Tax Act of 1958 are taxable under some cases and are listed as “Money from Other Sources” under the statute. However, the act, which was first passed in April 1958, was repealed in October 1998. As a result, before GTA was reintroduced in a new form and included in the Income-tax provisions in 2004, no taxes were levied on gifts in any form.
What are the tax consequences of gifts?
- In India, gifts are taxable in the following cases, according to Section 56(2) of the Income Tax Act: If you accept gifts worth more than 50,000 in a financial year without receiving anything in return, you are completely taxable.
- Apart from immovable property, such as jewellery, bonds, drawings, etc., that are received without consideration and amount more than $50,000.If property other than an immovable property is obtained in return for money and its fair market value is greater than $50,000.
Gifts Tax Exemption & Rules
| Gift Donar | Occassion | Value |
|---|---|---|
| Gift received from relatives ( Relatives including spouse, brother or sister of parents, brother and sister of self and spouse, parents in law, any lineal ascendant or descendant of self or spouse) | Any occasion | Any Amount |
| Immovable Property (Land or property) | NA | Stamp duty is below ₹ 50,000 |
| Any person | Inheritance of property | Any Amount |
| Any person | Marriage | Any Amount |
| Any person | Contemplation of Death | Any Amount |
| Any person | NA | ₹ 50,000 |
| Property received from local Authority | NA | As defined under section 10(20) of the Income-tax Act |
| Property received from | NA | As defined in Section 10(23C) |
| Property received from charitable trusts and NGO | NA | As specified under Section 12AA |
Provisions Concerning Gift Stamp Duty
If the stamp duty on gift deeds reaches 50,000, the value of stamp duty is considered when calculating gift taxes on immovable property or land.
In the following examples, it is achieved to prevent higher stamp duty due to the time difference between the agreement date and the date of registration:
- The date of the agreement and the date of registration are not the same.
- If the consideration is paid in full or in part before the agreement’s date for transfer, such as by check, bank draft, or electronic means.
In the event of a conflict over stamp duty assessment, the stamp duty valuation authority seeks documents and issues a written order of value according to Section 50C—the lower of the stamp duty value or the value calculated by the VO taking precedence.
FAQs
✅ Is property given as a gift taxable in India?
The gifted property is taxable in India if the stamp duty on immovable land or property earned without consideration exceeds 50,000 in a financial year. On the other hand, any gifted property is obtained from municipal authorities or another fund, foundation university, educational or medical establishments, charitable funds, or other similar sources.
✅ What is the gift tax in 2021?
The gifts tax provisions are set out in Section 56(2) of the Income Tax Act, and gifts obtained from particular sources are taxed as “Income from Other Sources” at the recipient’s Income Tax Slab Rate.
✅ What kind of form is the gift tax?
A gift tax is a form of direct tax charged by the gift receiver while filing their taxes.
✅ How do I stop paying gift tax?
If you got cash or if the stamp duty value on immovable property is less than $50,000, you do not have to pay gift tax. When a property is obtained from a medical or educational institution, charitable funds, or local governments, or when the property is inherited or received as a gift from family members, these gifts may be listed as “Income from exempt sources” on income tax returns.
✅ In India, who can give a tax-free gift?
Gifts from family members, local governments, charitable trusts or non-governmental organizations, medical or educational institutions, or on occasions such as land inheritance, marriage, or contemplation of death are not taxable in India. Any gift accepted from someone is tax-free if the value of the gift is less than $50,000.
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