Where to show gift received from relatives in ITR?

In India, property can be transferred via will or via gift-deed. While a will becomes effective after the death of the person writing the will, a gifted property gets transferred immediately. A property or money that's received through gift is taxable. Now, the question arises “how to show gift in income tax return?” Let me explain that: According to the law, gifts received by anyone are taxable under the ‘Income from other sources’ head at normal tax rates. The Income-tax Act, 1961 Section 56(2)(x) deals with provisions related to the gift tax.  

Kind of gift	Monetary threshold	Quantum taxable
Any sum of money without consideration	Sum is more than Rs.50000	Entire sum of money received
Any immovable property like building, land, etc. without consideration	Stamp duty value* is more than Rs. 50000	Property’s stamp duty value
Any immovable property for inadequate consideration	Stamp duty value* exceeds consideration by more than Rs. 50000	Stamp duty value Minus consideration Example 1: Stamp duty value: Rs. 2L Consideration: Rs. 75000. Taxable amount: Rs. 1.25L (stamp duty value exceeds consideration by more than Rs. 50000) Example 2: In the previous example, if consideration is Rs. 1.6L, the taxable gift is Nil as stamp duty value doesn’t exceed consideration by more than Rs. 50000
Any property (drawings, shares, jewelry, etc.) other than immovable property without consideration	Fair market value *(FMV) is more than Rs 50,000	FMV of such property
Any property other than immovable property for a consideration	FMV exceeds consideration by more than Rs 50,000	FMV Minus consideration

*Value set by stamp duty authority I hope now you know about where to show gift received from relatives in ITR and how to show gift in income tax return. Gift Exempt From Income Tax

ry of donee(recipient of gift)	Category of donor	Occasion covered
Individual	Relative (spouse, sister and brother of spouse and self, sister and brother of parents or parents-in-law, any lineal descendant or ascendant of spouse or self, spouse of any of the relatives specified here.	NA
Individual	Any person	Individual’s marriage
Any person	Any person	By way of inheritance or under a will
Any person	Individual	In contemplation of death of donor or payer
Any person	Local authority –Cantonment Board, Municipal Committee and District Board, Municipality, Panchayat.	NA
Any person	from any university or foundation or fund or other educational institution or any medical institution or any trust or institution referred to Section10(23C)	NA
Any person	Any religious or charitable trust registered under section 12AA or section 12A	NA
Any institution or trust or fund or any university or other educational institution or medical institution established for educational/philanthropic/religious/ charitable purpose and approved by the prescribed authority.	Any person	NA
Members of HUF	HUF	Any distribution of capital assets on partial or total partition of a HUF
Trust established or created solely for the benefit of individual’s relative	Individual	NA

  Read more: What is exempted from income tax? Who are exempted from income tax? What is perquisites in income tax? How to add legal heir in income tax? I hope you like my answer on how to show gift in income tax return.

Hi, 

While Mr. Sarthak has explained it quite elaborately about Gift from relative in ITR should be shown in which category. I believe I can help you understand better about gift from relative exempt from income tax. As you know, gifts from some individuals do not attract any Income Tax liability. Here is a list of relatives who can give you gift and you won’t have to pay taxes:

1. Spouse/ Partner

2. Brother or sister 

3. Brother or sister of the partner 

4. Brother or sister of either of the parents 

5. Any lineal ascendant or descendant 

6. Any lineal ascendant or descendant of the spouse 

7. Spouse of brother or sister

8. Partner of any lineal ascendant or descendant of the spouse 

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These are the other scenarios where you won’t have to show gift in ITR.

• Gift received in marriage

• Gifted received by inheritance executed through will

• Money received in contemplation of death of the individual or karta of the family

• Gifts obtained from local authority or charitable trust

How to show gift in ITR?

As explained by Mr. Sarthak, the gift can be shown in ‘Income from other sources’ section if the gift amount exceeds Rs. 50000 limit for the financial year.

I hope I was able to help you understand the nitty gritty of gift from relative exempt from income tax and how to show gift in Income tax returns.

Read more:

Can daughter be gifted agricultural property by father who is alive

What is the difference between sale and gift

We are frequently curious about the tax consequences of gift money and how it is taxed. Is the donor or the beneficiary subject to tax? If you are also curious to know about

gift tax in India, I will help you out here.

A gift is any asset that is obtained without asking for anything in return, such as cash, a house, shares, jewellery, etc., and the recipient counts as capital. Money, mobile property, or immovable property are all acceptable forms of payment.

Consult the legal experts of NoBroker to learn more about gift tax in India, here.

Rules for a gift received from relative is taxable

In order to learn about a

gift from relative to be shown in ITR

, let's go through some guidelines.

1) Gifts up to Rs 50,000 a year: Regardless of who gives the money if the value of the present is less than Rs 50,000 each year, the beneficiary will not be subject to tax. However, if the sum exceeds ₹50,000, it would be fully added to the recipient's taxable income.

2) Gifts from relatives: What happens if the recipient is blood-related? Even then does the basic norm of Rs 50,000 apply to all donors in general, such as friends? No. The total sum received in such circumstances is completely exempt from any taxation.

A relative would include any of the following for gift transactions:

1) The spouse of the person

2) The person's brother or sister

3) Spouse's brother or sister

4) The brother or sister of the person's parents

5) Any direct ancestor or descendant of the people

6) Any lineal ancestor or descendant of the person's spouse

7) The spouse of the individuals mentioned in (2) to (6)

Gifts & Clubbing of Income 

The money derived from the donation is not entirely exempt, but the gift itself is.

The income tax department subsequently divides the receivers depending on their dependence on the donor in order to prevent tax evasion and deter tax evaders from taking advantage of the loopholes. It is known as income clubbing.

Special Gifts & Income Tax Exemption

The gifts on the following list are completely exempt from taxation regardless of whether they have been received in cash or another form:

• Gift received as an inheritance or per a will.

• A gift offered at the time of the donor's death.

• A gift from any municipal government.

• Gift from any fund, foundation, hospital, school, another educational facility, trust, or institution mentioned in Section 10 (23C).

• Gift from any charity or trust, which would be registered as a public charitable trust under Section 12AA.

Marriage Gifts & Income Tax Exemption

According to the taxation of gifts clause, any gift received in the event of the marriage from any person is not subject to income tax. This exemption is unbounded in terms of money. However, taxes are due if presents are received for an engagement or wedding anniversary.

Do you need to report or show the gift received in your Income Tax Return?

According to the aforementioned principles, any money received from family members or for a wedding should not be reported as another source of income under the heading "Income from Other Sources" when submitting your taxes. These gifts do not meet the criteria for "Income chargeable to tax," hence they do not need to be disclosed in ITRs.

However, you can declare the value of the gift you got as "Exempt Income" in your ITR if you acquire a property through a registered gift deed (in which your PAN is mentioned). This is done to ward off future income tax authorities' examination. Additionally, it is advisable to get the gift deed executed when you receive a present.

With effect from 1 April 2017, cash gifts over Rs 2 lakh may be liable to a tax under Section 269ST, even if they come from family members. This is what you need to know about

gift tax in India.

Read More: What is the Limitation on Gift Tax in India?  Gift tax is which type of tax? How can my property tax bill name change on the basis of a gift deed transfer?

I heard that my friend’s wife received Rs 30 lakh from her brother as a gift. However, she did not mention it on her ITR and got a notice from the ITR department. I suggested my friend get advice from an ITR consultant. He informed them that gifts received from relatives are not subject to the gift tax, but one must disclose the same in their ITR. I was going through Shreya Singhal’s answer, and I completely agree with the list of gift tax exemption relatives India that she mentioned. 

The list includes; Spouse of the individual, brother or sister of the individual, brother or sister of the spouse of the individual, brother or sister of either of the parents of the individual, any lineal ascendant or descendant of the individual, any lineal ascendant or descendant of the spouse of the individual, spouse of the persons referred to in (2) to (6).

However, apart from this list the ITR expert also informed them that a gift received from a member of the HUF is also exempt from income tax.

Where to show exempt gift income in ITR?

He told them that a notice was sent because the Assessing Officer might be suspecting that they were trying to conceal income. From an income tax perspective, receipt of a gift from a relative does not trigger taxation, i.e., it is exempt in the hands of the receiver. However, it has to be disclosed as “Exempt income” in Schedule EI of the ITR form.

After getting clarified about their query, about “How to report gift income on tax return?” the ITR expert suggested them to gather all the documents and send them within the stipulated deadline mentioned in the notice and cooperate with the tax authorities in the proceedings.

Also, to expand on the topic of “how to declare gift in income tax return?” He advised them to obtain proof of her brother's regular income in the form of documents so that they could demonstrate his capacity to give such a gift. Along with the information like the cheque's number, date, and bank. 

Though there is a list of gift tax exemption relatives India, I’d like to suggest that you should provide full proof of information about every income that is credited to your account.

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Read More:

How to Show Borrowed Money in Income Tax Return? How to Show Purchase of Property in Income Tax Return? How to Show Sale of Property in Income Tax Return (ITR-2)  

I’ll help you with gift received from relatives where to show in ITR.

Gifts received from specified relatives are exempt from income tax. It means gifts received from relatives are not considered taxable income.

"Relative" is defined in the Act and includes:

1. Spouse

2. Sibling (brother or sister)

3. Spouse's sibling

4. Lineal ascendant (parent, grandparent, etc.)

5. Lineal descendant (children, grandchildren, etc.)

However, it's important to maintain proper documentation of the gift. It includes details like the giver's name, relationship, and the date of the gift to provide proof to the tax authorities.

If you receive a gift from a relative not covered by the exemption provisions, it is taxable as "income from other sources." You are required to pay tax on it as per the applicable tax rates.

This is

how to show gift received from relative in ITR.

 

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