Taxability of Gifts and Exemptions

Gift Tax Abolished

The Gift Tax Act was abolished w.e.f. 1.10.1998. No gift tax is payable on any gift received after 1.10.1998.

Cases where Gifts are taxable as Income of Recipient Individual / HUF

1. Monetory Gifts : Any Cash gift of money received without consideration, exceeding ₹ 50,000/- received during a previous year, by an individual or HUF from any person shall form part of taxable income of the recipient.
2. Gifts of Property : Following property received by an individual or HUF from any person, after 1.10.2009, shall form part of taxable income of the recipient :
   1. Where any immovable property (being a capital asset, namely land, building or both) is received without consideration, the stamp duty value of which exceeds ₹ 50,000/-, the taxable amount shall be the stamp duty value of such property.
   2. Where any immovable property is received for a consideration falling short of its stamp duty value by more than ₹ 50,000/-, the taxable amount shall be the amount of such shortfall.
   3. Where any movable property (being a capital asset, namely shares/securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art and bullion) is received without consideration, the aggregate fair market value(*) of which exceeds ₹ 50,000/-, the taxable amount shall be the aggregate fair market value(*) of such property.
   4. Where any movable property (being a capital asset, namely shares/securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art and bullion) is received for consideration, which is less than the aggregate fair market value(*) by an amount exceeding ₹ 50,000/-, the taxable amount shall be the aggregate fair market value(*) less amount of consideration.

   (*) The fair market value of the movable properties shall be determined as per Rule 11UA.

   Such gifts of money or property shall be taxable under the head 'Income from Other Sources'.

Exemptions

The gifts of money or property received by an individual or HUF is not charged to tax in following cases :

1. Money or property received from relatives.
   Relative for this purpose means:
   1. In case of an Individual
      1. Spouse of the individual;
      2. Brother or sister of the individual;
      3. Brother or sister of the spouse of the individual;
      4. Brother or sister of either of the parents of the individual;
      5. Any lineal ascendant or descendent of the individual;
      6. Any lineal ascendant or descendent of the spouse of the individual;
      7. Spouse of the persons referred to in (b) to (f).
   2. In case of HUF, any member thereof.
2. Money or property received on the occasion of the marriage of the individual.
3. Money or property received under will/ by way of inheritance.
4. Money or property received in contemplation of death of the payer or donor.
5. Money or property received from a local authority [as defined in Explanation to section 10(20) of the Income-tax Act].
6. Money or property received from any fund, foundation, university, other educational institution, hospital or other medical institution, any trust or institution referred to in section 10(23C).
7. Money or property received from a trust or institution registered under section 12AA.

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