Gifts & Taxation

In India, gifts are often exchanged on various occasions such as birthdays, weddings etc. While receiving a gift is a joyous occasion, it is important to note that the Income-tax Act, 1961 (Act) also governs how such gifts are treated for tax purposes.

- CA Pramod Prabhudesai

A "gift" can be of money, movable property (like jewellery, shares), or immovable property (like land or house) received without consideration and irrevocable. For taxation, gifts in the form of money are quite common and implications need to be noted. A person giving the Gift is called a Donor and person receiving the Gift is called a Donee. The taxation of the Gifts is donee based. Gifts are said to be "inter vivos." This Latin phrase means "between the living."

Are All Gifts Taxable?

All gifts are not taxable. The Act makes a distinction depending on who is the donor and/or the value of the gift.

Gifts from Relatives: (Exempt without monetary limit)