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Income Tax on Gifts — Cash, Property & Relative Exemption Rules

Updated: 3 June 2026  |  Income-tax Act 2025  |  Section 56(2)(x)

Gifts from relatives are fully exempt — no limit. Gifts from non-relatives: taxable if total exceeds ₹50,000/year (Section 56(2)(x)). Wedding gifts: fully exempt from anyone. Property gifts: stamp duty value taxable if from non-relative. Taxed as "Income from Other Sources" at slab rates.
₹50,000
Threshold — gifts from non-relatives above ₹50,000 in a year are taxable. Full amount taxable (not just excess).
Relatives (spouse, parents, siblings, children): no limit, fully exempt. Wedding gifts: always exempt regardless of amount or giver. Report taxable gifts under "Income from Other Sources" in ITR.

Gift Tax — Who Pays, What is Exempt

Gift TypeFrom RelativeFrom Non-Relative
Cash giftFully exemptTaxable if >₹50K/year
Immovable propertyFully exemptStamp duty value taxable if >₹50K
Shares / securitiesFully exemptFMV taxable if >₹50K
Jewelry / valuablesFully exemptFMV taxable if >₹50K
Wedding gift (any giver)ExemptExempt
Inheritance / willExemptExempt
Gift from employer—Up to ₹5K/year perquisite

Frequently Asked Questions

Is gift received in cash taxable in India?
Gift tax in India (Section 56(2)(x) Income-tax Act 2025): Cash gifts from NON-RELATIVES: if total cash gifts in a year exceed ₹50,000 — entire amount (not just excess) is taxable as "Income from Other Sources" at slab rates. Cash gifts from RELATIVES: completely exempt, no limit. Definition of relative: spouse, siblings, sibling of spouse, parents, siblings of parents (and their spouses), lineal ascendants/descendants (and their spouses). Friends and colleagues are NOT relatives — gifts from them are taxable. Wedding gifts: fully exempt regardless of amount or relationship (before/on/after marriage — Section 56(2)(x)(b)). Gifts under will or inheritance: exempt. Gifts on death: exempt. Anti-abuse: if gift is actually a loan repayment or business income disguised as gift — tax authorities may recharacterize.
Is gift of property taxable?
Immovable property gifts (Section 56(2)(x)): From NON-RELATIVE, if stamp duty value > ₹50,000 → taxable as income (stamp duty value added to income of recipient). From RELATIVE: completely exempt. At inadequate consideration (below stamp duty value): if difference > ₹50,000 or 10% of consideration, taxable on the shortfall (Section 56(2)(x)(b)). Movable property gifts (shares, jewelry, paintings, etc.): From NON-RELATIVE: if FMV > ₹50,000 → taxable (entire FMV). At inadequate consideration: if paid less than FMV (> ₹50,000 or 50% shortfall): taxable on shortfall. Shares received as gift: cost basis for capital gains = FMV on date of gift (Section 49). Subsequent sale: capital gains calculated using donor's purchase date (indexation benefit). HUF receives gift from member: exempt.
What gifts are completely exempt from tax?
Tax-exempt gifts in India: Gifts from relatives (as defined in Section 56(2)(x)): any amount, any type — fully exempt. Wedding gifts: received on occasion of marriage — fully exempt (from anyone, any amount). Gifts received under will / inheritance: fully exempt. Gift from local authority, government, registered charitable trust: exempt. Gifts from employer (within limits): employer gifts up to ₹5,000 per year exempt under Section 17(2)(viii); above ₹5,000: perquisite and taxable as salary. Anniversary/birthday gifts from employer: part of the ₹5,000 annual perquisite limit. Religious/charitable occasions: gifts from registered trusts — exempt. NRI receiving gift from resident: taxable if non-relative and > ₹50,000. NRI sending money to family in India: not a gift — remittance. Club vouchers, loyalty points: taxable if given by non-relatives and FMV > ₹50K.
What is the tax on gifting money abroad or receiving foreign gifts?
Foreign gifts and taxation: Receiving money from abroad (foreign gift): From relative abroad (NRI sibling, parent, spouse): exempt — relative definition covers NRIs. From non-relative abroad > ₹50,000: taxable under Section 56(2)(x) as income from other sources. FEMA compliance: receiving gifts > ₹50,000 from abroad must be reported under LRS/FEMA to bank. Gifts from foreign companies (non-relatives): taxable. Gifting money to someone abroad: Not an income for you. Recipient abroad: governed by their country's tax laws. LRS limit: Indian residents can remit up to $250,000 per year under Liberalised Remittance Scheme — gift remittances count within this limit. TCS: 20% TCS on remittances above ₹10L per year (from Budget 2023) — not a tax on gift, but advance tax credit for recipient.
How to report gift income in ITR?
Reporting gifts in ITR: Taxable gifts (from non-relatives > ₹50,000): reported under "Income from Other Sources" in ITR. ITR form: ITR-1 (if only salary + small gifts), ITR-2 (if property gifts or capital gains), ITR-3 (if business income). Schedule OS (Other Sources): Enter gift details — nature, amount, from whom. Exempt gifts: No need to report in ITR (but keep documentation). Property gifts: Even if exempt, update property records (mutation) as new owner. Capital gains on later sale: Use gifted asset's cost basis — donor's purchase price (indexed). Document keeping: Maintain gift deed (for property), bank transfer records, relationship proof, in case of scrutiny. Large cash gifts: avoid cash — prefer bank transfer for audit trail. Gift deed: recommended for all significant gifts, even from relatives, to establish genuineness.

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