Diwali Gifts : If you are getting gifts on the occasion of Diwali, the festival of happiness and its value is more than Rs 50,000, then you will have to disclose it while filing ITR, because according to the new tax slab, this amount is considered taxable. Is.
Diwali Gifts: The festival of Diwali is about spreading smiles and happiness. People also exchange sweets and gifts with their relatives and close friends during this time. Companies also give bonuses, gifts and sweets to their employees as gifts.
The exchange of gifts has become an essential part of the Diwali festival across the country. But, many people are unaware that gifts received in a financial year can be taxed under the existing Income Tax (IT) Act.
As per the Income Tax Act, certain gifts can be taxed on the basis of their value and from whom you have received them.
If the gift accepted by you does not qualify for exemption, then you have to disclose the same at the time of filing Income Tax Return (ITR).
When the total value of gifts to an individual exceeds ₹ 50,000 in a financial year, it becomes subject to tax as per section 56(2) of the Income Tax Act.
These gifts can be in the form of cash or kind. However, gifts given by close relatives or family members are exempted from tax. This means that you will not have to pay tax on gifts from your brother, sister, parents and spouse.
Please note that friends are not included in the definition of relatives. Thus, gifts received from them fall under the category of “income from other sources” and are subject to tax as per applicable tax slabs.
Gifts are classified into different categories on the basis of their nature.
Gifts such as cash, drafts or checks are treated as monetary gifts and can be taxed if the aggregate value exceeds ₹50,000 in a financial year.
If the gifts are given in the form of land or building, they are considered immovable property. Here, the gift becomes taxable if the stamp duty value of the property exceeds ₹ 50,000.
Meanwhile, gifts such as jewellery, paintings, paintings, shares/securities, and collections, among others, are movable property and are subject to tax if the fair market value of the goods received by an individual exceeds ₹ 50,000.
Jewelery received as a gift is also taxable. Motor car given as gift is not included in the definition of assessed movable property and thus cannot be taxed.
