Home > Income Tax > Help Center > Tax on Gifts Last Updated: Aug 29th 2022

Tax on Gifts in India | Exemption and Rules

Gifting is one of the many ways to express love and affection. India is a country with diversified culture where each occasion is a reason to celebrate and show love and affection to close family members and friends. This document covers the background, taxability, exceptions, frequently asked questions


  1. Background on Gift Tax
  2. Taxability of Gifts
  3. Gift Tax Calculator
  4. Exceptions for Taxability of Gifts
  5. Can the amount gifted to spouse reduce the tax?
  6. Frequent Questions
Gift Tax Calculator

1. Background on Gift Tax

The Government introduced Gift Tax in 1958 with an objective to impose taxes on gifts. Later Gift tax was abolished in 1998.

Later Gifts are brought into taxation w.e.f 2017. Section 56(2)(x) is introduced in Income Tax Act 1961 to tax the gifts. Any sum of money or value of property received without consideration or for inadequate consideration will be subject to tax in the hands of recipient.

2. Taxability of Gifts

The following are the cases in which gifts are taxable. Gifts are taxable in the hands of recipient under the head of "Income from Other Sources"

2.1 Monetary gifts received by Individuals/HUF: Any amount of money received by an individual/ HUF without consideration and the aggregate value of such money received during the year exceeds Rs 50000, it is taxable in the hands of individual or HUF.

Note: Monetary Gift includes amount received in cash, cheque, draft etc


2.2 Receipt of Immovable Property by Individual or HUF: If an immovable property is received

  1. Without Consideration: Stamp Duty Value of such property would be taxed in the hands of recipient if its exceeds Rs 50,000. It will be taxed under the head of "Income from Other Sources"
  2. For Inadequate Consideration: If consideration is less than the stamp duty value of the property and the difference between the stamp duty value and consideration is more than the higher of
    • Rs 50,000 and
    • 10% of consideration
Then the difference between the stamp duty value and the consideration shall be chargeable to tax in the hands of taxpayer as "Income from Other Sources"


2.3 Receipt of Movable Property by Individual or HUF: If Movable Property is received

  1. Without Consideration: The Fair Market Value of such receipt on the date of receipt would be taxed in the hands of recipient if it exceeds Rs 50,000. It will be taxed under the head of "Income from Other Sources".
  2. For Inadequate Consideration: If the difference between the fair market value and such consideration exceeds Rs 50,000, such difference shall be chargeable to tax in the hands of recipient as "Income from Other Sources".


3. Gift Tax Calculator

Gifts are of three types monetary, immovable property, and movable property, the taxability on such gifts vary depending on the Occasion and the person and/or entity from which such gift was received. Gift Tax Calculator gives you the taxability of a transaction.

Visit    Gift Tax Calculator  to know the taxability of a gift.

Or get a Tax Consultation appointment from a Tax Expert help from EZTax.in today

4. Exceptions for Taxability of Gifts

Any sum of money or value of property received in the following circumstances or from persons are not taxable

  1. Received from any relative
  2. Received on the occasion of marriage of the individual
  3. Received under a will or by way of inheritance
  4. Received in Contemplation of death of the payer or donor
  5. Received from any Local Authority
  6. Received from any fund, foundation, university, other educational institution, hospital or medical institution or any trust referred in Sec 10(23C)
  7. Received from a trust or institution registered u/s 12AA or 12AB
  8. Received from such class of persons and subject to such conditions as may be prescribed

'Relative' for the Income Tax Purpose means the following persons


In case of an Individuals
  1. Spouse of the individual
  2. Brother or Sister of the individual
  3. Brother or sister of the spouse of the individual
  4. Brother or sister of either of the parents of the individual
  5. Any lineal ascendant or descendent of the individual
  6. Any lineal ascendant or descendent of the spouse of the individual
  7. Spouse of the persons referred to in (b) to (f)
In Case of HUF:
Any member of HUF

5. Can the amount gifted to spouse reduce the tax?

There is no restriction on the amount of gift given by husband to wife or vice versa. There is no taxability as spouse is covered in the list of relatives. But before gifting, you need to pay taxes on the income earned. For the amount gifted to spouse, you will not get any tax deduction or exemption.

If you wife earns any income on the gift given, it will be clubbed in your hands as income in the year of receipt.

6. FAQs

1.I have received a property on the occasion of my birthday. Do I need to pay taxes on the property received?

Gifts received only on the occasion of marriage is exempted from tax. There is no other occasion where individual can claim exemption of taxes on the Gifts. Hence Gifts received on occasions like birthday, anniversary etc will be taxable under the Income from Other sources if there is no consideration or inadequate consideration.

2.I have received gift of Rs 1 Lakh from my spouse’s brother. Will it be taxable?

​​​​No, As the spouse brother is included in the list of relatives, it will not be taxable.

3.I have received a car worth Rs 3 Lakhs from my friend for Rs 1 Lakh . Do I need to pay taxes?

Yes, As the friend is not included in the definition of Relatives, you need to pay taxes under the head Income from Other Sources. The difference between fair market value and amount paid by you i.e., 3 Lakhs-1 Lakh = 2 Lakhs will be taxable

4.I have received Rs 35000 as my birthday gift from my friend. Do I need to pay taxes?

As the consideration is less than Rs 50,000, it is not taxable in your hands under the head Income from other sources.

5.I have received Rs 15000 my friend Ram, Rs 20,000 from other friend Krishna and Rs 25000 from Arjun. As all the gifts are less than Rs 50,000, do I need to pay taxes?

The taxability of gift needs to be determined on the basis of the aggregate value of gift received during the year and not on the basis of individual gift. As the aggregate value of gifts received during the year exceeds Rs. 50,000, entire Rs 60,000 is taxable in your hands



Complete Tax Compliance Solution from EZTax.in

What we do ?

We provide Complete end-end solutions in Income Tax, TDS, GST, Accounting & Registrations for both individuals, and SME businesses through Software, Apps, & Expert Services.

Client Speak: Over 4.8 out of 5 rating among 34,000+ Clients, 2300+  Customer Reviews on Google, EZTax.in (read as 'Easy Tax') is a Fast growing, Highest customer rated, reviewed Tax Compliance Company in India