Yes, gifts are taxable if they are worth more than INR 50,000 but exemptions are also there, so it is necessary to study them if you are planning to gift something. Also the relation you share with the person plays an important role.
When it comes to taxability of the gifts, not all gifts are taxable in India but the gifts which are exceeding the amount of INR 50,000 are taxable irrespective of whatever the gift is.
When the gift amount increases INR 50,000 it is taxable under the category ‘Income from other sources’ at the basic rate of tax issued by the government. In India, there is a trend of gifting some or the other present in various occasions such as Diwali, Birthdays, Raksha Bandhan, Christmas, Eid, etc., and so it is necessary to be mindful of the presents and the amount of presents that are to be gifted. Tax is levied on the person who receives the gift under Gift law, 1958.
The law is imposed on everything exceeding INR 50000 irrespective of whatever the gift is, and all the immovable products are accounted to be taxable under Stamp duty. It is also important to identify what are the products and in what relations do they fall under tax exemptions category. These exemptions depend upon the occasion, product and how is gifting the product.
Some of the exemptions include:
• When an individual receives any gift from a relative in case of any occasions.
Relative as in:
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 descendant of the individuals
6. Any lineal ascendant or descendant of spouse of the individuals.
• Any amount of money or any sort of gift that a person receives due to inheritance or a contract of any individual.
• Gifts or money received in case of marriage.
• Any amount of money or property obtained by any fund, organization, college, or other academic establishment, hospital, healthcare facility, foundation, or other referred organization.
Therefore, it is necessary to evaluate the choices before gifting to what categories are taxable or which ones are not to make a suitable and a smarter choice as there are various categories and exemptions available to the people.