Income Tax for non-cash gifts effective from October 1, 2009

Introduction

You have to pay the tax for the gifts received, if it is from the non-relatives. There is no tax if the gift is given by the relative. The following section will explain the clear meaning of relatives in the Income Tax perception. Also there is no tax if the gifts are in any kind other than cash. There is a change in this provision, this article will explain that in detail. If you have any doubts please post it in the comments section. Subscribe to our future articles here.

Also Read:

Income Tax on Gifts as Income of Source

Who are relatives under Gift Tax Act?

The following are the relatives under gift tax act.

• Your spouse;
• Your brothers and sisters and their spouses;
• Your spouse’s brothers and sisters and their spouses;
• Brother and sister of your parents and their spouses;
• Any lineal ascendant (parents, grandparents, children, grandchildren) or descendants (children, grandchildren);
• Any lineal ascendant (parents, grandparents, children, grandchildren) or descendant of your spouse (children, grandchildren)

Tax on Non-Cash Gifts

• If you are receiving the gifts more than Rs.50000 in a financial year from a non-relative person, you have to show that in the IT returns and pay the tax.
• But, the gift is in the form of shares, gadgets, automobiles, jewelry, valuable artifacts or even property valued at over Rs 50,000 as gifts from non-relatives, will have to start paying tax from October 1, 2009.
• This provision was not there prior to October 1, 2009. If you are receiving any valuable gifts, you have to show that in the IT returns to pay the tax.

Summary

It is new provision added by the Central Board of Direct Taxes (CBDT) authority. This act will reduce the misuse of tax exemption on gifts such as valuable things. Thank you for reading this article. If you have any doubts, post it in the comments section

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