Receiving gifts is usually a pleasant experience, but the taxability of these gifts is one issue that often confounds people. Additionally, whether they come from a person's spouse or family. Setting a ceiling on such gifts is challenging. The Income Tax Department has established a set of guidelines for the taxation of gifts received by an individual or a Hindu Undivided Family (HUF), so you don't need to worry. Let's take a closer look at the regulations and rules governing presents from partners or other family members.
A gift is defined as any amount of money received without payment or any movable or immovable property that is received without consideration, according to a circular from the I-T department. This category also includes mobile and immovable assets that are acquired for an insufficient amount of consideration or at a lower price than the market price. According to the regulations, every gift that over Rs 50,000 in a fiscal year is taxable.
If a person receives a present from a family member, there won't be any taxes to pay on the amount. The related should be, according to the Income Tax Department:
I. The subject's spouse
II. The person's brother or sibling
III. Either the person's parents' brother or sister
IV. A person's spouse's sister or brother
V. The taxpayer's spouse's lineal ancestor or ascendant
6. A taxpayer's lineal ancestor or descendant
VII. The spouse of the individuals mentioned in groups II through VI.
Gifts given to someone on their wedding day are exempt from taxes. “Aside from marriage, there is no other situation in which a person receives money without having to pay taxes on it. Therefore, monetary presents received for events like birthdays, anniversaries, etc. will be taxed, according to the I-T Department's circular.
If a HUF or a person receives financial gifts delivered from outside India that total more than Rs 50,000 and do not fall under one of the exclusions provided by the Income Tax Department, the money will be taxed.
Additionally, in situations when a monetary present exceeds Rs 50,000, taxes is based on the total amount given rather than the value of each gift individually. The overall value of gifts received in a year, rather than only the portion that exceeds the threshold limit, will be taxed if the value of the present exceeds Rs 50,000.