Income Tax Rule 2025 : How much tax will be levied on gifts received at a wedding, know the income tax rules..

Marriage Gift Tax: In India, weddings are not just a social ritual but a big occasion of gifts and spending. The question that often arises is whether wedding gifts are taxable. The answer is both 'yes' and 'no', as it depends on who gave the gift, when, and to whom. Under specific rules, some gifts are tax-free, while others may be taxable.

There is a provision for tax on gifts under Section 56(2)(x) of the Income Tax Act, 1961. However, there are certain exemptions on the occasion of marriage, but not in all situations.

What are the tax rules on wedding gifts?

In India, gifts (cash, property, etc.) worth more than Rs 50,000 are taxable in a financial year. However, this rule does not apply strictly to wedding gifts, making them generally tax-free. This provision also allows exemptions in some other special circumstances.

Are these gifts exempt?

Gifts received by the bride or groom are not taxable, whether the giver is a relative or a non-relative.

This exemption is limited only to the occasion of marriage; gifts given before or after that will be taxable.

This provision is valid only for the bride and groom, not for other family members.

For example, if a friend gives a gift of Rs 5 lakh to the groom on the wedding day, it will be tax-free. But if the same friend gives a gift of Rs 1 lakh to the groom's father, it can be considered taxable.

Which gifts are taxable?

If a person receives a gift of more than Rs 50,000 apart from the occasion of marriage and that person is not a close relative, then he may have to pay tax as gift income. The definition of relatives includes parents, siblings, grandparents, mother-in-law, father-in-law, husband, wife, son, daughter, and their spouses.

If you receive any gift of more than Rs 50,000 from a non-relative other than marriage, then you may have to pay gift income tax on it. Close relatives include parents, siblings, grandparents, mother-in-law, father-in-law, husband and wife, son and daughter, and their spouses. Gifts received from them are not taxable.

According to experts, valuable gifts like stocks, jewelry, land, house, or car are also included in tax exemption, provided they are received by the bride or groom on the occasion of marriage.

Details have to be given in the ITR-

Even though the gift received by the bride and groom at the wedding does not come under the purview of tax, tax experts still advise that details of gifts of large value be given in the Income Tax Return (ITR). This helps in calculating capital gain tax when selling the property in the future.

Why is caution necessary?

The Income Tax Department has been keeping a close watch on gift income in recent years. Showing unaccounted cash or property under the pretext of tax-free gifts can be considered tax evasion. According to experts, if you do not disclose taxable gifts in your ITR, a penalty of up to three times the amount of the gift can be imposed.

Therefore, all gifts exceeding Rs 50,000 in a financial year should be disclosed, which are taxable under Section 56 (ii) of the Income Tax Act. It would be wise to keep a proper record of all gifts and consult a tax expert if needed.

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