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In a creative Arjuna-Krishna dialogue themed around Diwali, the discussion highlights the tax implications of gifts received during festive occasions. Krishna explains that while gifts from relatives or on occasions like marriage are fully exempt, gifts from non-relatives exceeding Rs 50,000-whether
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Gifts received from specified relatives of any amount or type are fully exempt from income tax.
Gifts from non-relatives are exempt if their total value is less than £50,000 in a financial year. If the total value exceeds £50,000, the entire amount becomes taxable in the hands of the recipient.
A deduction can be claimed by the giver only if the gift is for business promotion and properly recorded as such. Personal gifts do not qualify for any deduction.
Input Tax Credit (ITC) under GST cannot be claimed by the giver on goods distributed as gifts. The value of the gift, including GST, becomes the giver's cost.
Under Section 194R, a 10% TDS is applicable if the value or aggregate value of benefits or perquisites (like cars, gold coins, sponsored trips) provided to a resident with business income exceeds £20,000 in a financial year.
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