Income Tax Rules: Tax will have to be paid on gifts received on birthday and wedding, know the income tax rules

New Delhi. On occasions like weddings, birthdays or anniversaries, friends and relatives give cash, jewellery, property, vehicles as gifts. Are these gifts also taxable? This question regarding tax comes to the mind of many people.

Let us know in this article what rules the Income Tax Department has made regarding gift tax.

What is the category of gift?

• Let us tell you that the gifts have also been divided into categories.
• Monitor gifts include cash, cheques, drafts, UPI payments and bank transfers.
• Real estate includes land, houses, shops, flats and commercial properties.
• Movable property includes paintings, shares, bonds, coins, jewelery etc.

Are gifts taxable?

There is no tax on gifts received at weddings. The government does not charge tax on them. Let us tell you that this rule does not apply to gifts received by the parents or relatives of the bride and groom. Apart from these, there is no tax to be paid on gifts received in the will or on monetary gifts and property.

Under the Income Tax Act 1961, there is no tax on gifts up to Rs 50,000 in a financial year. However, taxpayers will have to declare all these gifts while filing returns (ITR). Gifts received on birthday or any other occasion are considered income from other sources.

If the gift is more expensive than Rs 50,000, the price of all the gifts is added up and taxed as per the tax slab.

Is income from gifts taxable?

If someone receives a property as a gift and later rents it out from which he earns income, he has to pay tax on it.

Apart from this, if a scheme like FD is received as a gift, then the interest received on it is also a form of income. This type of income is also taxed. However, taxpayers can claim tax benefits on this income while filing returns.

What tax benefits can be claimed on loss on gift?

If the amount received as gift is used for business and if the business incurs losses, then he can also claim that loss in income tax.

Think of it like this, if someone receives a check of Rs 5 lakh as a gift and he uses this amount to start a business. If there is a loss of Rs 2 lakh in that business, then it can claim up to Rs 1 lakh while filing income tax return (Income Tax Rules).