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Taxable advice from gift received

18 June 2025

Hii,

If my friend give me gift as 5cr any asset, so how I I treat with general entry, and after this gift I want to pay tax because amount is too High and I am not able to pay tax, so how do I treat with this entry

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (8249 Points)
Replied 18 June 2025

Gift Tax Implications When receiving a gift valued at ₹5 crore, the tax implications depend on the relationship between the donor and the recipient. Taxability of Gift - *Taxable Gift*: If the gift is received from a non-relative, it is taxable in the hands of the recipient. - *Exempt Gift*: Gifts received from relatives are exempt from tax. General Entry for Gift Receipt If the gift is in the form of a movable or immovable property, the recipient can record the gift receipt with the following general entry: - *Journal Entry*: Debit the asset account (e.g., "Property" or "Investment") and credit the "Gift Received" account or "Income from Gifts" account. Paying Tax on Gift If the gift is taxable and the recipient wants to pay tax on it, the tax liability would depend on the recipient's income tax slab and the gift's value. Options for Paying Tax If the recipient is unable to pay the tax, they could consider: - *Installment Payment*: Requesting the tax authorities to allow installment payments for the tax liability. -

*Tax Planning*: Exploring tax-saving options or deductions available under the Income-tax Act to reduce the tax liability. Important Considerations -

*Gift Deed*: It's essential to have a proper gift deed or documentation to prove the gift's existence and value. -

*Valuation*: The gift's value should be determined accurately, considering the market value or fair market value. -

*Tax Consultation*: Consult a tax professional to ensure compliance with tax laws and regulations.

Conclusion To navigate the tax implications of receiving a gift valued at ₹5 crore, consider the following: -

*Determine Tax Liability*: Calculate the tax liability based on the gift's value and the recipient's income tax slab. -

*Explore Payment Options*: Consider installment payments or tax planning strategies to manage the tax liability. - *Seek Professional Advice*:

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