Do you know that money acquired as reward can be taxable in India? Nonetheless the revenue tax division does have an eligibility standards for this. As per the IT-department pointers, any sum acquired with out consideration by a person or HUF is taxable if the combination worth of such sum acquired through the yr exceeds Rs 50,000. Sadly, however fairly true, when you reward money worth is past Rs 50,000, then you’ll come underneath the revenue tax bracket. These taxes are included as revenue from different sources. Presents in type of both money, cheque, draft, and so forth. all of them are taxable. Nonetheless, not all should pay taxes even when they’ve acquired over Rs 50,000 money reward.
Firstly, one ought to be aware that, the taxability of the reward is set on the idea of the combination worth of reward acquired through the yr, and never on the idea of particular person reward. Therefore, if the combination worth of presents acquired throughout a yr exceeds Rs 50,000, then worth of such presents acquired can be charged to tax.
Nonetheless, the division additionally reveals that, within the following circumstances nothing can be charged to tax in respect of any sum of cash acquired by an Particular person or HUF with no consideration, if the identical is acquired:
If the quantity is from any relative or by a HUF from its members; or on the event of the wedding of the person.
Additionally, when you this quantity arises from a will/ by the use of inheritance, or in contemplation of dying of the payer or donor because the case could also be.
Additional, even when cash is presented from a neighborhood authority as outlined underneath Clarification to clause (20) of part 10 of the Revenue-tax Act, 1961. Similar applies to any fund, basis, college, different instructional establishment, hospital or different medical establishment, any belief or establishment referred to in part 10.
Even when the quantity comes from any fund, belief, establishment, any college, different instructional establishment, any hospital, different medical establishment referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (by way of) of clause (23C) of part 10; or (relevant if the property is acquired on or after 1st day of April, 2017).
In the meantime, if in case you have acquired reward from a belief or establishment registered underneath part 12AA; or from a belief or establishment registered underneath part 12A, they won’t be taxes.
Lastly, from an Particular person by a belief created or established solely for the good thing about relative of the Particular person. Any sum acquired by the way in which which isn’t thought to be switch accordance with part 47.
Therefore, when you obtain any reward money from the above talked about authority or medium, then you have to be aware they don’t seem to be taxable.