It is the month of february, better known as the month of Love! You might be planning to gift your valentine with an expensive gift. But do take care of taxes. As per the Income-tax Act, gift from relative is exempt (so it’s better to marry your valentine first and then gift). Income-tax act has defined the term “Relatives”. Now, who all are considered as relatives?
Well, the following persons are considered as “Relatives”:
– Your Spouse (husband or wife).
– Your own blood brother/sister or your spouse’s brother/sister (including their spouses).
– Your parents and your spouse’s parents
– Lineal ascendants and descendants of either of the parents are also included.
It means gifts received only from the above mentioned persons are exempt. Remember that “fiancée” is not included in relatives.
Income-tax Act also provides that cash gifts from any non-relative is also exempt from tax up to Rs. 50,000 in a Financial year. So, if value of gift is less than Rs. 50,000 it would not be taxable in the receiver’s hands. But if the total value of gifts exceeds Rs. 50,000 in a financial year – the entire amount shall be added as Income from other sources of the receiver and your beloved will have to pay tax on it. So, this Valentines, spread love and shower gifts but do take care about the taxes on it!