Under what circumstances a gift is taxable? When it is not taxable?

If a person receives a gift of Rs 50,000/- or more in a financial year then total amount of gift received is taxable under Income-tax. In case total gifts received are less than Rs. 50,000/- then same will not be considered as income and there will be no tax on it.

There are some exceptions in above statements, gifts received under following circumstances are not taxable:

1) Gift received on the occasion of marriage of an individual.

2) Gift received under a will or by way of inheritance.

3) Gift received from any of following relatives is always exempted from tax:

A. For Individual

a. Spouse of Individual.
b. Brother or sister of Individual.
c. Brother or sister of the spouse of Individual.
d. Brother or sister of either of the parents of Individual.
e. Any lineal ascendant or descendant of Individual.
f. Any lineal ascendant or descendant of the spouse of Individual.
g. Spouses of persons referred in (b) to (f).

B. For Hindu Undivided Family (HUF)

 Any Member of the said HUF.

4) Amount received in contemplation of death of the payer.

5) Amount received as gift or otherwise from any local authority.

6) Amount received as gift or otherwise from any charitable institute registered u/s 12AA.

7) Amount received as gift or otherwise from any educational institute, hospital, any fund, foundation, university, trust u/s 10(23C).

 Please Note:

A. In case of Immovable Property (as gift or otherwise)

a. If there is no consideration paid by the buyer and 'Stamp Duty Value' of said property is more than Rs 50,000/- then  'Stamp Duty Value' of such property will be considered as Income (this is required to be considered property wise).

b. If consideration paid is less than 'Stamp Duty Value' (on the date of agreement) and the difference between consideration paid and stamp duty value is more than Rs 50,000/-, then the amount of difference will be added to income of the buyer (this is required to be considered property wise).

B. In case of any Property other than Immovable Property (as gift or otherwise) (eg. shares and securities, Jewellery, archaeological collection, drawings, paintings, sculptures, any work of art and bullion, etc.)

a. Where no consideration is paid and aggregate fair market value of said property is more than Rs 50,000/- then the whole of the aggregate fair market value will be considered as Income (this is required to be considered in aggregate for the year).

b. If consideration paid is less than fair market value and the difference between consideration paid and fair market value is more than Rs 50,000/- then the amount of difference will be added to income of the buyer (this is required to be considered property wise).