Only 12 days are left for the festival of Diwali. This is not only a festival of happiness and lights, but also a festival of gifts and bonuses. This is why everyone gives gifts to each other on this occasion. Companies also give gifts to their employees on this occasion. But do you know that goods or money received as gifts are taxable in India? If not, then today we will tell you which gifts are taxable according to income tax and how much tax is to be paid on how many gifts.
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What are the income tax rules on gifts?
According to income tax rules, gifts up to Rs 50,000 in a financial year are exempt from tax. If the gift amount exceeds Rs 50 thousand, it becomes taxable. That is, if you have received gifts worth more than Rs 50 thousand in a year, then you will have to pay income tax on the entire amount.
You can understand it in this way that if you have received gifts worth Rs 25,000 and Rs 28,000 during the same financial year, then the total amount becomes Rs 53,000. In such a situation, it will be taxable, which will be added to your income and will be taxed as per the tax slab.
When will there be no tax?
If gifts worth more than Rs 50 thousand are received, it is considered as ‘income from other sources’. If this amount had been Rs 25,000 and Rs 18,000, then the total value of gifts received in the whole year would have been Rs 43,000. In such a situation you do not have to pay any tax.
There is no tax on gifts received from them
Tax liability on gifts also depends on who is giving the gift. If you have received a gift from relatives, then there is no tax on gifts received from relatives, even if the amount of the gift exceeds Rs 50 thousand. Relatives include spouse, brother or sister, parents, spouse’s parents, and others.