Taxation Rules: Gifts are received on celebrations like marriage, birthday or anniversary. Many people have a question in their mind regarding these gifts, are these gifts also taxable? In this article, let us know how much tax is levied on the gifts we receive and what is the rule of the Income Tax Department regarding this. Read the full news..
New Delhi. On occasions like wedding, birthday or anniversary, friends and relatives give cash, jewellery, property, vehicles as gifts. Are these gifts also taxable? This question comes to the mind of many people regarding tax.
Come, let us know in this article what rules have been made by the Income Tax Department regarding Gift Tax.
What is the category of gift?
- Let us tell you that gifts are also divided into categories.
- Monitor gifts include cash, cheque, draft, UPI payment and bank transfer.
- Real estate includes land, house, shop, flat and commercial property.
- Movable property includes paintings, shares, bonds, coins, jewellery, etc.
Is there tax on gifts?
There is no tax on gifts received at weddings. The government does not charge tax on them. Let us tell you that this rule does not apply to the gifts received by the parents or relatives of the bride and groom. Apart from these, no tax has to be paid on gifts received in the Will or on monetary gifts and property.
Under the Income Tax Act 1961, there is no tax on gifts up to Rs 50,000 in a financial year. However, taxpayers have to give information about all these gifts while filing the return (ITR). Gifts received on birthday or any other occasion are considered income from other sources.
If the gift is more expensive than Rs 50,000, then the price of all the gifts is totaled and tax is levied as per the tax slab.
Is tax levied on income from gifts?
If someone receives a property as a gift and later puts that property on rent from which he gets income, then he has to pay tax on it.
Apart from this, if a scheme like FD is received as a gift, then the interest received on it is a form of income. This type of income is also taxed. However, taxpayers can claim tax benefits on this income while filing returns.
What tax benefit can be claimed on loss on gift?
If the amount received as a gift is used for business and if there is a loss in the business, then he can claim that loss in income tax also.
Understand it like this, if someone receives a check of Rs 5 lakh as a gift and he uses this amount to start a business. If there is a loss of Rs 2 lakh in that business, then he can claim up to Rs 1 lakh while filing Income Tax Return (Income Tax Rule).
