Last Updated: January 25, 2023, 14:02 IST
The recipient of the present must pay taxes on it as income if the gift’s value is greater than Rs. 50,000.
The recipient of the present must pay taxes on it as income if the gift’s value is greater than Rs. 50,000. Gifts come in all shapes and sizes.
The nation has its eyes set on the Union Budget 2023, which will be tabled in Parliament in about a week. For the common man, tax cuts and exemptions are among the most important aspects of the budget. Will the latest budget leave more disposable income in the hands of a spender is what bothers us the most? This could be done by raising the basic exemption cap, reducing tax rates, adding new exemptions or deductions for costs and investments, and raising the dollar limits on already-existing deductions and exemptions.
However, there is something to be discussed and that is Gift Tax. In India, gift taxes were first enacted in 1958. It is charged in specific situations when giving or receiving gifts totalling more than Rs 50,000. The government eliminated this in 1998. To be included in the Income Tax provisions, it was revived in 2004 in a revised form.
The recipient of the present must pay taxes on it as income if the gift’s value is greater than Rs. 50,000. Gifts come in all shapes and sizes, including money, jewellery, real estate, stocks, cars, and more.
Exemptions?
1) Income obtained from relatives is not taxable. This includes income from any blood related but excludes income from cousins and friends.
2) Money obtained as an inheritance or by will.
3) Money received in anticipation of the payer’s or donor’s death.
4) Funds obtained from a local government [as described in the Explanation to Section 10(20) of the Income-tax Act].
5) Funds received from any trust, institution, university, foundation, hospital, or other medical facility listed in section 10 as well as other educational or medical institutions (23C). With effect from AY 2023–24, this exemption is unavailable if a specific individual mentioned in section 13(3) receives a sum of money.
6) Income derived from or provided by a trust or organisation recognised by sections 12A, 12AA, or 12AB
7) Funds, trusts, institutions, universities, other educational institutions, hospitals, and other medical facilities mentioned in Section 10(23C)(iv), (v), and (vi) may all receive money (via).
8) Any funds obtained as a result of a company’s demerger, amalgamation, or business reorganisation under Section 47.
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