How are Gifts Taxed?

What does the Income Tax Act say about gifts?

The I-T Department considers:

money given in cash/cheque or drafts
immovable property such as land or building or both
movable property like shares, jewellery, drawings, paintings or sculptures, gold bars as gifts.

gift tax

You are exempt from tax under the following situations:

monetary value of all gifts received don’t add up to Rs.50,000.
Received from a relative (see below)
Received on occasion of marriage
Received by way of a will or inheritance
Received in contemplation of death of the payer
Received from Local Authority
Received from a fund, foundation, university, or other educational institution, hospitals, or any trust of institution defined in Section 10(23C)
Money Received from a charitable Institution registered under section 12AA

These are chargeable under the head “Income from Other Sources” in the receiver’s income tax returns

Gift received	Condition	Tax treatment
Money	Total money received as gift exceeds Rs. 50,000.	Chargeable to tax
Immovable Property received as a gift	Stamp Duty value of property exceeds Rs.50,000	Stamp Duty value chargeable to tax
Immovable Property received with some consideration	Stamp Duty Less Consideration > Rs.50,000	Amount Chargeable to Tax = Stamp Duty – Consideration
Movable Property without any consideration	Fair Market Value of property > Rs.50,000	Total Fair Market Value is chargeable to tax
Movable Property with some consideration	Total Fair Market Value Less Consideration > Rs. 50,000	Amount Chargeable to Tax = Total FMV – Consideration