Indian festivals are incomplete with out exchanging presents. Loads of presents starting from money, gold, diamonds, monetary presents resembling shares, land and so on. are exchanged between buddies and households. The presents that you simply obtain may not at all times be tax free. You may be required to pay taxes on them if the reward worth exceeds ₹50,000. Items acquired as much as ₹50,000 are fully tax free but when this quantity is breached, the entire quantity of presents develop into taxable. For an occasion, you probably have acquired ₹55,000 price of presents throughout a monetary 12 months, full quantity of ₹55,000 will probably be taxable below the top ‘ revenue from different sources.’ Part 56(2) of the Earnings Tax supplies for taxation of presents acquired in the course of the 12 months in case mixture worth of all of the presents, whether or not in money or in type throughout a 12 months, exceed fifty thousand rupees.
The edge quantity of ₹50,000 applies to mixture of presents acquired throughout a monetary 12 months. The taxability of the reward is set on the premise of the mixture worth of reward acquired in the course of the 12 months and never on the premise of particular person reward. If the mixture worth of presents acquired in the course of the 12 months exceeds ₹50,000, then mixture worth of such presents acquired in the course of the 12 months will probably be charged to tax.
Items exempt from tax
Items acquired from relations are exempt from tax. by advantage of Part 56 of the Earnings Tax Act. In line with the IT Act, following individuals can be thought-about as relative –spouse, brother or sister, brother or sister of the partner, brother or sister of both of the dad and mom, any lineal ascendant or descendent, any lineal ascendant or descendent of the partner, partner of the individuals referred above.
Mates don’t come below ‘relative’ and any presents acquired from them are taxable.
Additional, presents acquired on the time of marriage are exempt from tax. However, reward acquired on events like birthday, anniversary, and so on. of a person will probably be charged to tax.
Items acquired below will/ by means of inheritance and presents acquired in contemplation of loss of life of the donor are additionally tax free.
Methods to tax immovable property acquired as a present?
Stamp responsibility of immovable property is chargeable to tax, if stamp responsibility worth exceeds the consideration worth of the immovable property by no less than ₹50,000.
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