Gifts can be in the form of cash, movable property (car , jewellery, art work, etc.) or immovable property (land /building). But the rule doesn’t apply in all cases; there are a few exceptions.
The festive season has begun and the marriage season will begin soon. Receiving and giving gifts is an integral part of the celebrations. But you ought to know that if you receive gifts worth Rs 50,000 or more in a financial year, you may be liable to pay tax.
Gifts can be in the form of cash, movable property (car , jewellery, art work, etc.) or immovable property (land /building). But the rule doesn’t apply in all cases; there are a few exceptions in service tax auditing firm in delhi.
A gift is not taxable, if…
1) The aggregate value of the gifts is less than Rs 50,000 in a year.
2) You have received it from your relatives – your spouse, brother or sister, spouse’s brother or sister, brother or sister of either of the parents, your spouse’s or your lineal descendant and ascendant, brother’s or sister’s spouse.
3) You have received it on the occasion of marriage.
4) You have received an immovable property without any consideration from a relative, on the occasion of marriage, or inherited it from a local authority, from a specified registered trust or institution or from a specified fund or foundation or university or medical institution in foreign investment approvals.
A gift is taxable, if…
1) Received from friends.
2) Received on occasions like birthday or anniversary.
3) Received from your employer. Sudhir Kaushik, CFO and Co-founder of Taxspanner.com, says: “As a gift is over and above the salary that the employer has agreed to pay, it will be fully taxable in the hand of employee.”
4) Received from abroad.
5) You have more than one gift with each costing below Rs 50,000 but if the total cost of gifts for the financial year is more than Rs 50,000. “If the spouse has received a gift, it will be taxable in his or her hand; it will not be clubbed with the other spouse’s income,” says Kaushik of Taxspanner.com.
How gifts are taxed:
1) The aggregate value of gifts received will be taxed.
2) In case of movable property, the fair market value (FMV) of the gift is calculated and if no consideration was paid, the entire amount is taxable. If some consideration was paid, the FMV of the gift minus the consideration is taxable.
3) In case of immovable property, if the stamp duty value is greater than Rs 50,000, total stamp duty is chargeable to tax. In case some consideration was paid, then the amount arrived after deducting the consideration from stamp duty is taxable.
4) The value of the gift thus calculated will be added to your income and will be taxed as per the slab under the head “Income From Other Sources”. Gifts received in cash are directly added to the income and taxed as per slab.
1) The aggregate value of gifts received will be taxed.
2) In case of movable property, the fair market value (FMV) of the gift is calculated and if no consideration was paid, the entire amount is taxable. If some consideration was paid, the FMV of the gift minus the consideration is taxable.
3) In case of immovable property, if the stamp duty value is greater than Rs 50,000, total stamp duty is chargeable to tax. In case some consideration was paid, then the amount arrived after deducting the consideration from stamp duty is taxable.
4) The value of the gift thus calculated will be added to your income and will be taxed as per the slab under the head “Income From Other Sources”. Gifts received in cash are directly added to the income and taxed as per slab.
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