Gift tax is which type of tax ?

Hey friend, 

There is nothing more I love than seeing the look on someone’s face when I give them a thoughtful gift. I love getting gifts for myself as well. My friend told me that the gifts have to be taxed as well. I took a deep dive on the internet to find out about gift money tax. Keep reading to know details about the same. 

Gift tax can be deemed as a type of direct tax. I will now explain to you what direct tax is. It is a type of tax or charge that is imposed directly on the taxpayer. It is supposed to be paid directly to the government. Few other examples of direct tax are income tax, corporate tax, wealth tax, expenditure tax etc. On the other hand, a few examples of indirect taxes are sales tax, excise duty, VAT, service tax, entertainment tax, customs duty etc.

The recipient of the gift will need to pay tax while filing their ITR or Income Tax Returns. Taxation on gifts falls under Income Tax Act as there is no specific gift tax act currently. Gifts were made a part of Income-tax in the year 2004. Earlier on, there used to be an act on gift tax, it was called the Gift Tax Act 1958. It was later repealed in 1998.

If you don’t pay the gift tax, it will be counted as tax evasion which is prohibited under the law.

Take a look at the gift money tax on the table. 

This is all from my end on gift money tax. I hope the answer was helpful.

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