Income Tax: If you give a gift to your parents, what tax will you have to pay, this is the rule..

There is a tradition of giving gifts to relatives and friends in Indian culture. If you go to someone's house, you take a gift with you. Gifts are also given on occasions like weddings, birthdays, etc. But do you know that there are some conditions in the Income Tax Act, due to which the taxpayer gets tax exemption on the gifts received?

Let us tell you that the income tax levied on gifts is not levied on any one gift, but it is levied on the total gifts received in a financial year. Many people have many questions in their minds regarding this. Like - if I give a gift to my parents, will I have to pay tax? Let us tell you about it.

On giving gifts to parents

According to the Indian Income Tax Act, there is usually no tax to be paid by a person on giving gifts to his parents. However, there are some conditions and rules based on which it is decided whether the gift will be taxed or not. If you give a cash gift to your parents, there is no upper limit, and it is completely tax-free. If you gift any property to your parents, it will also be tax-free. But it is mandatory to get a gift deed made. You can gift gold, shares, jewelry, etc. as they are tax-free.

Gifts received from parents

Gifts received from parents are tax-free under Section 56(2) of the Income Tax Act. Therefore, you will not have to pay any tax on a gift of Rs 20 lakh. Therefore, you do not need to submit any documents, but it is important to keep the gift bill for personal records for any future reference. On the other hand, if the parents later sell the gifted property, they may have to pay capital gains tax.

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