What is the limit of tax exemption on the gift to relative and friend? The person who wants to gift money to someone, whether he is liable to pay tax? He does not want to get any tax benefit. To which extent the gift is tax free? Can I make a gift to my relatives or friends to the extent of that exempted limit? Please advise.
In India, gifts received from specified relatives are tax-free up to a certain limit under Section 56(2)(x) of the Income Tax Act. The specified relatives include parents, spouse, brother or sister, etc.
According to the Income Tax Act, gifts received from specified relatives are tax-free up to a certain limit. For the financial year 2021-22, the limit is Rs 50,000. This means that gifts received from specified relatives up to Rs 50,000 are not considered as income and are therefore not subject to income tax. Any gifts received above this limit may be subject to tax as “income from other sources.”
It is important to note that the person giving the gift is not eligible for any tax benefit. The tax benefit applies only to the person receiving the gift. The person giving the gift is not required to pay any tax on the gift, but they may need to pay gift tax if the value of the gift is above a certain limit.
It’s also worth mentioning that while gifting money or assets to specified relatives are tax-free, if you gift to a non-specified relatives or non-relatives, it will be considered as taxable income for the receiver.
It is recommended to consult a tax professional to understand the tax implications of gifting money or assets.
You can gift money or assets to your specified relatives or friends to the extent of the tax-free limit. However, it is recommended to consult a tax professional to understand the tax implications of gifting money or assets.
It’s also worth mentioning that while gifting money or assets to specified relatives are tax-free, if you gift to a non-specified relatives or non-relatives, it will be considered as taxable income for the receiver.
