Budget 2023: There may be a big announcement in the budget regarding tax on gifts
Budget 2023: Only a few days are left for the general budget to come. People have many expectations from the upcoming budget. One of which is expected to remove tax on gifts. Let us tell you that gift tax was introduced in India in 1958.
Highlights
- Gifts received from relatives are tax free under section 56 of the Income Tax Act.
- Friends do not come under the category of relatives and gifts received from them are taxable.
- Let us tell you that gift tax was introduced in India in 1958.
New Delhi. Budget 2023: Only a few days are left for the general budget to come. People have many expectations from the upcoming budget. One of which is expected to remove tax on gifts. Let us tell you that gift tax was introduced in India in 1958. It is levied on giving and receiving of gifts exceeding Rs 50,000 under certain circumstances. The government abolished it in 1998. However, it was reintroduced in a new form in 2004 and it was included in the Income Tax provisions.
If the value of the gift exceeds Rs.50,000, the gift is charged to tax as income of the person receiving the gift. Gifts can be in any form including cash, jewellery, property, shares, vehicles etc.
Significantly, there is no tax on the donations received by political parties. In such a situation, the common man is hoping that this tax can be removed in the budget.
As per section 56(2) of the Income Tax Act, gifts received in a financial year are chargeable to tax as “Income from other sources” as per the slab rate. However, gifts from close family members are exempted. Although Diwali gifts generally depend on the person giving them. Under section 56(2)(x) of the Income Tax Act, 1961, gifts received by the taxpayer attract tax. These things are included in the gifts that come under the ambit of tax.
No tax on car
Under the Income Tax Act, property worth more than Rs 50,000 can include shares and securities, jewelry, archaeological collections, paintings, paintings, sculptures and art or bullion etc. However, the car does not come under the ambit of property. Hence car may not be subject to gift tax.
Tax exemption on gifts received from them
Under Section 56 of the Income Tax Act, gifts received from relatives are tax free. According to the Income Tax Act, husband, wife, brother, sister, brother-in-law of husband and wife i.e. brother-in-law and sister-in-law, siblings of parents i.e. maternal uncle and uncle, people who are related by blood, or husband and wife with whom blood Be it a relation, they come under the category of relatives. There is no tax on any kind of gift received from these people. But friends do not come under the category of relatives, gifts received from them are taxable.
