HomeAbout UsCapabilites
Services
Audit & Assurance
Financial Statement audit & attestationFinancial Reporting advisory
Advisory
Link 1Link 2Link 3
Tax
Link 1Link 2Link 3
Business Services & Outsourcing
Link 1Link 2Link 3

Service

Audit & Assurance

Tax & Regualtory

Advisory

Bussiness & Outsourcing

Audit & Assurance

Financial Atatement Audit & Attestation

Financial Reporting Advisory

Tax & Regualtory

Corporate Tax

Indirect Tax

Finacial Sector

Family Office,estate & succession Planing

Advisory

Mergers & acquisitions

Valuation

Due diligence

Corporate finance & investment banking

Start-up advisory

hgghhgdgfhhgd

IPO advisory

IT risk advisory & assurance

Sustainability & ESG

BFSI advisory

Management consulting

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accouting & Trust Accounting

Virtual CFO

Payroll

Services

Audit & Assurance
Tax & Regulatory
Advisory
Business & Outsourcing

Audit & Assurance

Financial Statement Audit & Attestation

Financial Reporting Advisory

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Tax & Regulatory

Corporate Tax

Indirect Tax

Financial Sector  

Family, Office, Estate & Succession Planning

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Advisory

Mergers & Acquisitions

Valuation

Due Diligence

Corporate Finance & Investment Banking

Start-up Advisory

Promoter Restructuring & Succession Planning

IPO Advisory

IT Risk Advisory & Assurance

Sustainability & ESG

BFSI Advisory

Management Consulting

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accounting & Trust Accounting

Virtual CFO

Payroll

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Services

Services

Audit & Assurance
Tax & Regulatory
Advisory
Business & Outsourcing

Audit & Assurance

Financial Statement Audit & Attestation

Financial Reporting Advisory

Featured

What is the COSO framework?

September 24, 2024

Going Concern: What It Means for Your Business

August 8, 2024

Fraudulent Financial Reporting

June 19, 2024

Tax & Regulatory

Corporate Tax

Indirect Tax

Financial Sector  

Family, Office, Estate & Succession Planning

Featured

Invoice Management System (IMS) under GST

September 18, 2024

GST IMPORTANT ANNOUNCEMENTS via CIRCULAR NO. 230 to 233 dated. 11th Sept. 2024

September 18, 2024

GST IMPORTANT ANNOUNCEMENTS IN 54TH GST COUNCIL MEETING (September 9, 2024)

September 13, 2024

Advisory

Mergers & Acquisitions

Valuation

Due Diligence

Corporate Finance & Investment Banking

Start-up Advisory

Promoter Restructuring & Succession Planning

IPO Advisory

IT Risk Advisory & Assurance

Sustainability & ESG

BFSI Advisory

Management Consulting

Featured

TAXATION OF INFLUENCERS AND CONTENT CREATORS: THE NEW FRONTIER

June 24, 2025

Corporate Social Responsibility (CSR)

June 23, 2025

Compulsory Convertible Debentures (CCD) & Compulsory Convertible Preference Shares (CCPS)

July 29, 2024

Business & Outsourcing

Finance & Accounting Outsourcing

Global Outsourcing

Compliance

Fund Accounting & Trust Accounting

Virtual CFO

Payroll

Featured

LEAVE & LAW POLICIES FOR EMPLOYEES IN INDIA

May 9, 2024

SOCIAL SECURITY LAWS- PF & ESIC

April 20, 2024

SOX Compliances

January 6, 2023

Audit & Assurance
Financial Statement Audit & AttestationFinancial Reporting Advisory
Advisory
Mergers & AcquisitionsValuationDue DiligenceCorporate Finance & Investment BankingStart-up AdvisoryPromoter Restructuring & Succession Planning IPO Advisory IT Risk Advisory & AssuranceSustainability & ESGBFSI advisoryManagement Consulting
Tax & Regulatory
Corporate TaxIndirect taxFinancial sector  Family, office, estate & succession planning
Business & Outsourcing
Finance & Accounting OutsourcingGlobal outsourcingComplianceFund accounting & Trust AccountingVirtual CFOPayroll
Solutions
Multinational CorporatesIndian CorporatesStartups
BlogsBlogsCareersContact UsContact Us
Schedule a consultation

Taxation of gifts received in cash or kind

By
Team Bilimoria
June 3, 2021

Introduction:-

Gifts are usually capital receipts by nature. The Income Tax Act, 1961 (‘Act’) which is levies tax on incomes, that is revenue receipts, carves out certain exceptions and levies tax on capital receipts as well. Gifts are one such receipt. The Act defines gifts as any asset received without consideration like money or money’s worth (in kind). It can include Cash, movable property, immovable property, jewellery, etc. If such gifts are received from a close relative, it is not taxable. If received from others, the value if equal to less than Rs. 50,000, no tax is levied on the recipient. But if the value exceeds Rs. 50,000, the whole amount is taxable under the head “Income from Other Sources (IFOS)” as per the prevalent slab rates or rates of income tax.

Till 1st October, 1998 all gifts including gifts to relatives (barring few exceptions) were chargeable to tax under the hands of the giver under Gift Tax Act, 1957 at flat rate of 30%. Later from assessment year 2005-2006 the concept of recipient based taxation on gifts was introduced to curb the practice of tax planning/tax evasion.

Which gifts are taxed under the Act?

  • Gifts received by Resident Individuals and HUF’s
    • From whichever source, wherever situated
    • Received wherever in the world
  • Gifts received by Non-Residents / Not Ordinary Residents
    • Received or deemed to be received in India
    • Accrues or Arises (or is deemed to) in India

The Act provides source based taxation as well under certain cases and therefore if the source (the giver) is in India, Gift may become taxable

Relatives Under Income Tax Act, 1961:

“Relatives” is defined as follows in case of Individuals under the Act:

Spouse of all the above individuals are also considered as relative

Taxation Of Gifts:

The Gifts received are usually without consideration. In certain scenarios the gifts consist of some consideration whether in money or in kind the value of which is neglible. The Act has also brought such bogus transactions in the name of gifts under taxation by introducing the term “Inadequate Consideration”. Thus any asset received from a person other than relatives for Inadequate Cosideration attracts tax under the head “Income from Other Sources” Let us understand all the scenorios of taxation under one chart:

(Note: FMV stands for Fair market value and SDV stands for Stamp Duty Value)

Taxability Of Income Generated From Gifts Received:

Gifts received are tax free as per the specified limits but if any income is generated from it, the same is taxable as per the respective heads of the Act. Let us understand the Income and its taxability based on the nature of assets:

Conclusion:

  • All other persons such as Firm, Company, AOP’s, BOI’s are excluded from exemptions, but they can be the giver.
  • Gifting won’t result in Evasion of Tax.
  • Any Income arising from the Gift received is Taxable.
  • A Gift Deed is highly recommended when a person wishes to gift his property or any amount of money to a relative or any other person.
  • Any person beyond the definition of relative is not a relative under the Act.
  • Gifts received by NRI’s are also taxable. This means that regardless of destination of the receiver, the Origin of the Gift is relevant for the purpose of Taxation in India.

(This article represents the views of the authors only and does not intent to give any kind of legal opinion on any matter)

Authors:

Ashish Raithatha

Consultant | +91-9819911153 | ashish.raithatha@masd.co.in

Kushal Mehta

Associate Consultant | +919930612247 | kushal.mehta@masd.co.in

Explore More

June 24, 2025

Team Bilimoria

TAXATION OF INFLUENCERS AND CONTENT CREATORS: THE NEW FRONTIER

In recent years, the rise of social media has given birth to a new and powerful profession: AN INFLUENCER What began as individuals sharing their personal lives, opinions, and talents online has now evolved into a full-fledged marketing industry. Influencers are people with a dedicated following on social media platforms like Instagram and YouTube who partner with brands to promote products and services in a relatable & authentic way. This form of marketing, known as influencer marketing, has gained immense attraction due to its ability to reach niche audiences and drive engagement.

Read More

June 23, 2025

Team Bilimoria

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is outlined in Section 135 of Companies Act, 2013 and has been made mandatory for the companies following the specified criteria from April 1, 2014. CSR Activities were introduced with an intention to allow companies to contribute to the social, environmental, and economic development of the country.

Read More

Read All Blogs

BILiMORIA MEHTA & CO. is a leading Chartered Accountancy firm with a rich legacy of serving clients in India and internationally.

info@bilimoriamehta.com

+91 (22) 6697-2111

Company

  • About Us
  • Contact Us
  • Careers
  • Resources

Solutions

  • for Startups
  • for Indian Corporates
  • for Multinational Clientele

Solutions

  • Multinational Corporates
  • Indian Corporates
  • Startups

Services

  • Audit & Assurance
  • Tax & Regulatory
  • Advisory
  • Business & Outsourcing

Resources

  • Blogs
  • Regulatory Updates
© 2024 BILiMORIA MEHTA & Co. All Rights Reserved
Privacy PolicyTerms & Conditions