India has no separate gift tax — gifts are taxed as Income from Other Sources under Section 56(2)(x). Gifts from specified relatives (parents, spouse, siblings, children, grandparents, in-laws) are fully exempt with no limit. From non-relatives, if the total value of all gifts in a financial year exceeds Rs 50,000, the entire amount — not just the excess — is taxable at your slab rate. Wedding gifts and inheritance are always exempt.
The Rs 50,000 threshold applies to the aggregate of all non-relative gifts in the year, and once you cross it the whole amount becomes taxable — not merely the part above Rs 50,000. Example: Rs 60,000 of gifts from friends means all Rs 60,000 is taxable, not Rs 10,000.
Tax Treatment by Gift Scenario
Every common gift scenario, whether it is taxable, and the relevant clause of Section 56(2)(x). "FMV" is fair market value; "SDV" is stamp duty value.
| Gift Scenario | Taxable? | Limit / Condition | Clause |
|---|---|---|---|
| Cash / property from parents, spouse, siblings, children | No | No limit — relative exempt | 56(2)(x) proviso |
| Cash from friend / colleague (non-relative) | If > Rs 50k | Aggregate of all non-relative gifts in FY | 56(2)(x)(a) |
| Immovable property from non-relative | If SDV > Rs 50k | Stamp duty value taxed | 56(2)(x)(b) |
| Shares / jewellery / securities from non-relative | If FMV > Rs 50k | Fair market value taxed | 56(2)(x)(c) |
| Gift received on the occasion of marriage | No | Any amount, any donor | 56(2)(x) proviso (I) |
| Inheritance / gift under a will | No | All assets, all amounts | 56(2)(x) proviso (II/III) |
| Gift from a registered trust / institution u/s 12A/10(23C) | No | Subject to conditions | 56(2)(x) proviso |
Threshold and rules under Section 56(2)(x) were not changed by Budget 2025. Gifts are added to total income and taxed at your applicable slab.
Who Is a "Specified Relative"?
Gifts from the relatives below are always exempt, regardless of amount or asset type. Anyone outside this list is a "non-relative" for whom the Rs 50,000 aggregate limit applies.
| Relationship | Covers |
|---|---|
| Spouse | Husband / wife (income from gifted funds may be clubbed u/s 64) |
| Brother / sister | Your own siblings, including half and step-siblings |
| Brother / sister of spouse | Brother-in-law, sister-in-law |
| Brother / sister of either parent | Uncles and aunts |
| Lineal ascendants | Parents, grandparents, great-grandparents |
| Lineal descendants | Children, grandchildren |
| Lineal ascendants / descendants of spouse | Parents-in-law, spouse's grandparents |
| Spouse of any relative above | Sibling's spouse, child's spouse, etc. |
Note: cousins, friends, fiancé/fiancée and in-laws' siblings are NOT relatives under this definition — the Rs 50,000 limit applies to gifts from them.
If your spouse or minor child receives a gift from you and invests it, the income earned on that gift can be clubbed back with your income under Section 64. The gift itself stays exempt; only the returns it generates are attributed to you. Gifts between adult family members (e.g. parent to major child) do not trigger clubbing.
Received property or shares as a gift and unsure of the tax?
Talk to a Tax Expert →Gifts That Are Exempt Regardless of Amount
Beyond gifts from relatives, Section 56(2)(x) fully exempts these — no Rs 50,000 cap applies:
- Gifts received on the occasion of your marriage — from anyone, any value (only for the person getting married).
- Inheritance or property received under a will, or in contemplation of death of the donor.
- Gifts from a local authority, or from a fund / trust / institution registered under Section 12A / 10(23C).
- Money received from an employer as a genuine gift up to Rs 5,000 a year (over this, taxed as salary perquisite, not under 56(2)(x)).
How the Rs 50,000 Cliff Works
The limit is tested on the total of all non-relative gifts in the financial year. Here are two people who both receive gifts from friends.
Below limit — stays exempt
Over limit — fully taxable
In the second case, the full Rs 60,000 is added to income and taxed at the slab rate — a 30% taxpayer pays roughly Rs 18,720 (incl. 4% cess). See our income-tax slabs to find your rate.
Likely tax-free if
- The gift is from a parent, spouse, sibling or other listed relative
- It is a wedding gift or an inheritance under a will
- Your total non-relative gifts in the year stay at or below Rs 50,000
Watch out if
- Total gifts from friends / non-relatives cross Rs 50,000
- You receive property or shares from a non-relative below market value
- A large "gift" is really a disguised loan or unaccounted cash
How to Report Gifts in Your ITR
Taxable gifts go under Schedule OS (Income from Other Sources) and are taxed at your slab. Exempt gifts from relatives are best disclosed in Schedule EI (Exempt Income) for transparency. There is no TDS on gifts — the recipient alone is responsible for declaring and paying the tax.
For any significant gift, keep a gift deed (mandatory and registered for immovable property), route money through banking channels, and retain proof of the relationship. A "gift" the department believes is a disguised loan or unexplained cash can be taxed under Section 68/56 with penalty.
- Gift deed for property or high-value gifts
- Bank statement showing the transfer
- Proof of relationship with the donor
- Wedding invitation / date (for marriage gifts)
- Copy of the will (for inheritance)
- Donor's PAN for large transfers
- Valuation / stamp duty value of property received
- Fair market value of shares or jewellery received
Want us to report your gifts correctly and file your return?
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