Taxation of 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.

When are gifts exempt from 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

Who is a relative?

• Your immediate family - parents, siblings, spouse and children
• Your spouse's parents and siblings
• Your parents' siblings
• Your siblings and their spouses

Abhishek Ranjan Singh 
ARS Solutions 
www.arssolutions.co.in 
+919022838615 

Note : If you find our reply useful. Please Score us by clicking on "THANK USER"

Thank you Sir. But that only solves one part of my query. The other part is that whether the interest income earned from such gift will be taxable in the hands of donor (under clubbing) or will it be normally taxed in the hands of donee?

Clubbing provisions are not applicable in your case and hence it will be normally taxed in the hands of parents.