A lot of people raise questions like what are the gift taxes in India?
Do we all need to pay the gift tax?
How does it work? And many more such questions when it comes to the gift taxes.
We have all always received gifts in childhood and even when we grow older.
Everyone loves to get gifts from their loved ones.
Certain gifts have tax implications on them, and there is a set of rules for gift tax in India.
Let us first understand what gift tax in India is?
There are five categories of gifts which attract gift taxes, and it is as follows:
● Any amount of money in the form of cash or cheque:
If a person gets a cash gift, which is above Rs 50,000 in a year, then the whole amount will be chargeable as tax.
Below the amount of Rs 50,000, there is no tax liability, so the person can receive that much amount, but it is essential to remember that above this amount, there are tax liabilities that need to be paid.
If the amount is Rs 60,000, then the whole amount will be charged for tax.
● The immovable property in India:
If someone receives a gift of immovable property in India, which exceeds the stamp duty of Rs 50,000, then the amount will be charged for tax.
● Immovable property for consideration but has less stamp value
If the immovable property has consideration for less stamp value, then the difference between the consideration and stamp value will be considered as a chargeable amount for tax.
● Gift tax on the movable property without consideration in India:
If someone gets movable property such as securities, jewelry, shares, and things like these without any consideration during the previous year, which exceeds the amount of Rs 50,000, then the whole value will be considered as the chargeable amount for tax.
● Movable property which is less than fair market value but has consideration:
If there is a gift of movable property like jewelry, shares, securities and much more things are received for a consideration which is less than the fair market value, and the amount exceeds more than Rs 50,000 then the difference between the fair market value and consideration is the chargeable amount for tax.
There are different amounts of cash that relatives can give you and which won't be charged or will be charged for the tax.
The relatives can give you any gifts, but various gifts are considered for the exemption of the tax.
Some gifts are free from the tax liability, but some gifts will charge you some amount of tax, and it all depends. The gift tax has started coming under the income tax topic, so it is imperative to remember and consider that if you receive any gift of more than Rs 50,000 other than your relatives, then it will be considered as a
chargeable tax amount.