Monetary items acquired on events like birthday, anniversary, and so forth. shall be charged to tax. (Representative picture)
Gifts acquired on the event of an individual’s marriage won’t be topic to taxation.
It’s at all times a pleasant feeling to get items however one factor that usually leaves taxpayers confused is the taxability of those presents. That too, if they’re from one’s partner or their members of the family. It is tough to maintain a restrict on such items. But you needn’t fear because the Income Tax Department has laid out a algorithm concerning the taxation of items acquired by a person or Hindu Undivided Family (HUF). Let us have a look intimately on the legal guidelines and provisions concerning items from spouses or different members of the family.
According to a round, by the I-T division, a present is assessed as any sum of cash acquired with out consideration or any movable/immovable properties which can be acquired with out consideration. Movable and immovable properties which can be acquired at a lowered charge than the market value (i.e. for insufficient consideration) additionally fall beneath this class. As per the principles, any reward above Rs 50,000 in a monetary yr is topic to taxation.
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In case the reward acquired by a person is from a member of the family, the quantity won’t be taxed. As per the Income Tax Department, the relative must be:
I. Spouse of the person
II. Brother or sister of the person
III. Brother/sister of both of the person’s dad and mom
IV. Sister/brother of the person’s partner
V. A lineal descendent or ascendant of the taxpayer’s partner
VI. A lineal descendent or ascendant of the taxpayer
VII. Spouse of the individuals referred to within the classes from II to VI
Gifts acquired on the event of an individual’s marriage won’t be topic to taxation. “Apart from marriage, there is no other occasion when a monetary gift received by an individual is not charged to tax. Hence, monetary gifts received on occasions like birthday, anniversary, etc. will be charged to tax,” the I-T Department has said in its round.
In case of financial items despatched from overseas, if the mixture worth acquired by a HUF or particular person exceeds Rs 50,000, and the items don’t come beneath the exceptions listed by the Income Tax Department, then the cash shall be taxed.
Also, instances the place the financial reward exceeds Rs 50,000, the taxation is set on the mixture worth, and never the person reward. This means if the worth of the reward exceeds Rs 50,000, then the full worth of the items acquired in a yr shall be topic to taxation, not the quantity over the brink restrict.
