Income Tax Act, 1961(“the Act”) provides the tax treatment on receipt of gift and certain assets by an individual from his relatives and other person. If the assessee receives any gift from the person other than relatives, where aggregate of such sum, in a financial year exceeds Rs. 50,000 then whole of such sum would be taxable under the head “income from other sources”. What does the provision say?

• Gift received in the nature of sum of money from persons other than relatives:

If the aggregate sum of money received by an individual or Hindu Undivided Family during the financial year from any person or persons exceeds Rs. 50,000 in aggregate, the whole of such sum shall be chargeable to income tax under the head “income from other sources”.

• Gift received in the nature of Immovable property:

If any immovable property is received by an individual or HUF without any consideration and the value of such property for stamp duty purpose exceeds Rs. 50,000, the value of the property for stamp duty purpose shall be taxable under the head “income from other sources”.

• Gift received in the nature of properties other than immovable property:

If any property other than immovable property is received by an individual or HUF without any consideration and the fair market value of such property exceeds Rs. 50,000, then the fair market value of such property shall be taxable under the head “income from other sources”. However, the above provision shall not apply, if received

• from any specified relative;
• on the occasion of the marriage of the individual (not restricted to relative per se);
• received in contemplation of death of the payer;
• received from any local authority;
• received from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in the Act; and
• from any trust or institution registered under the Act.

Property includes immovable property being land or building or both, shares & securities, jewellery, archaeological collections, drawings, paintings, sculptures, any art work and also includes bullions w.e.f. 01.06.2010. For the purpose of this section “relative” means:

(i)Spouse of the individual

(ii)Brother or sister of the individual

(iii)Brother or sister of the spouse of the individual

(iv)Brother or sister of either of parents of the individual

(v)Any lineal ascendant or descendant of the individual

(vi)Any lineal ascendant or descendant of the spouse of the individual

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