Tax Update: On which gifts does the government collect income tax and which gifts are tax free?
Weddings, birthdays, festivals or any family function...there are many such occasions when we receive gifts from our family and close ones. We all take these gifts with great pleasure. But do you know that we have to give information about many gifts while filing ITR? Income Tax Return (ITR) has to be filed by 31 July 2024 for the financial year 2023-24. In such a situation, know here what is the rule of income tax on gifts-
Why income tax on gifts?
Many people will have this question in their mind why is income tax levied on gifts? So let us tell you that gifts are considered income from other sources. If the total value of gifts received by you in a financial year is more than Rs 50 thousand, then tax is imposed on it. This is added to your annual income. After this, income tax is charged to you according to the tax slab you fall in.
Income tax is not levied on gifts received from everyone
It is not that income tax is imposed on all types of gifts. If you receive gifts from family members with whom you have blood relations, then there is no income tax on such gifts. You can take gifts of any value from your family members or give them to them. But if any of your friends give you cash, jewelry, shares, or any other gift worth more than Rs 50 thousand, then it comes under the ambit of tax. Your friends and acquaintances are not your relatives, you are not related to them by blood, hence their gifts come under the ambit of tax.
Understand these rules also
There is no tax on gift transactions between husband and wife because the income from gift transactions comes under the purview of income clubbing.
The gift received on marriage is completely tax-free, whereas the gift received from the employer comes under the ambit of tax.
If a gift worth up to Rs 50 thousand is received from friends or acquaintances in a year, it is kept tax-free, if the value is more than Rs 50 thousand, tax has to be paid.
There is no tax liability on property received from close relatives, but tax has to be paid on the sale of that property.
There is no tax on the property received in the will, but tax has to be paid on selling this property.
Follow our Whatsapp Channel for latest update