Attention Friend gave expensive Diwali gift? You may have to pay heavy tax, know the rules. diwali-gift-tax-rules-india-income-tax-on-expensive-gifts

New Delhi:

Amidst the happiness of Diwali, it is common to receive gifts from friends and relatives. But if any of your friends or acquaintances has given you an expensive gift on this festival, then be careful. According to the rules of the Income Tax Department, this gift of happiness can also put a heavy tax burden on your pocket. Actually, not every gift is tax free. Today we will tell you when and how much tax you may have to pay on these gifts.

Under Section 56(2)(x) of the Income Tax Act, if you receive gifts worth more than Rs 50,000 from non-relatives such as friends or acquaintances in a financial year, then you have to pay tax on the entire amount. Keep in mind, this exemption is not applicable per gift but on the total value of all gifts received in the entire year. For example, if you received a phone worth Rs 55 thousand from a friend, then tax will be deducted not only on Rs 5 thousand, but on the entire Rs 55 thousand as per your tax slab.

On which gifts there is no tax?

• Cash or cheque: Amount given by bank transfer or cash.
• Immovable property: Land, flat or house, if the stamp duty value is high.
• Movable property: Jewellery, shares, paintings, expensive watches, coins or electronic items.

When will you not have to pay tax?

Not every gift is taxed, some important exemptions are also given in the law:

• Gifts received from relatives: There is no tax on gifts received from parents, spouse, siblings or blood relatives, regardless of their value.
• Wedding occasion: All gifts received from friends or relatives on the occasion of marriage are completely tax-free.
• Gift received from office: Voucher or gift up to Rs 5,000 received from the employer/company in a year remains tax-free. If the value is more than this, it is considered taxable under salary perquisites or perks.