Exempt or tax free gift under income tax

If the gift from a relative is large, a documentary evidence like a gift deed is necessary.

Gift Tax on Cash Gift:

The first major rule which every person should know is that there is no tax to be paid on gifts received (cash or kind), if the amount of the gift is upto Rs 50,000 in a year.

However if the total amount crosses Rs 50,000 . Then you will have to pay the tax on the total amount received (not additional).

Gift Tax on Movable/ Immovable properties:

There is a valuation aspect involved in gifting of immovable properties

• If the property is gifted without any consideration then if the stamp duty value exceeds Rs. 50000/-, stamp duty value will be taken
• If the property is gifted for a consideration, then the actual value of the property will be taken

In case of other properties:

• If gifted without consideration and fair market value exceeds 50,000, then the fair market value will be taken as the final value
• If gifted for a consideration and the Fair Market Value (FMV) less consideration is greater than 50000, then the FMV less consideration amount will be taken as the value of the gift.

Gifts received from any relative, as defined under the Act, is not taxable.

In case of gift of money received from a relative, it is advisable to have gift deed/letter of understanding exchanged and kept in records by the recipient of the gift for future reference. Hence, it is prudent to maintain documentary evidence in respect of the gifts received, to avoid any dispute with tax authorities at a later stage.

Following are considered as relatives(in case of individual) under income tax act::

1) spouse of individual -----husband/wife
2)brother / sister of individual
3)brother/ sister of spouse of individual -----brother in law/sister in law
4)brother/ sister of either of parents of indiviual -----chacha/mama/bua/maasi

5) lineal ascendents/descendents of individual -----daada/daadi/naana/ naani

6)lineal ascendents/descendents of spouse of individual
7) spouse of persons mentioned abv(1---6)
 

What is the tax liability if gift received from FIANCEE ( WOULD BE SPOUSE).

Fiancee is not specified in the defination of Relative under Income Tax Act, Hence gift received in excess Value of Rs. 50,000/-,would be taxable in the hands of Receiver. 

Gift from Fiancee before marriage would be tax as gift received for non relatives...

After marriage or on the occassion of marriage would be exempt from tax...

Whether ring received at the time of engagement is gift.

and is it taxable?

In case the marriage is not happan , can a person claim the ring.

Gift received at the time of marriage from non relatives is exempt...

or else it will chargeable to tax..

If the marriage is cancelled, the ring can be given back. 

Whether it can be taken back.

Yes it can be taken back..

Hence, TDS return can be claimed for the same...

Dear All,

          Can anyone tell me the Court Judgement in connection with gift received from relatives.

          Regards,

         Balaji