Taxability of gifts during Diwali and marriage:
Taxation of Diwali gifts:
1. If the value of gifts received from non-relatives during Diwali exceeds Rs. 50,000, these gifts fall under the category of “Income from other sources” and become subject to taxation as per Sec 56 of the Income Tax Act.
2. The term “relative” in taxation terms includes a comprehensive list of relationships that are considered close family connections. These relationships encompass various individuals who are closely related to the taxpayer.
3. As per Sec 56(2) the term relative includes:
In case of an individual
1. Spouse of the individual
2. Brother or sister of the individual
3. Brother or sister of the spouse of the individual
4. Brother or sister of either of the parents of the individual
5. Any lineal ascendant or descendant of the individual
6. Any lineal ascendant or descendant of the spouse of the individual
7. Spouse of the person referred to in above points
In case of HUF – Any member of the HUF
Taxation on wedding gifts:
1. The gifts newlywed couples receive on the occasion of their marriage from individuals are not taxable.
2. These gifts can be in any form, such as a house, property, cash, jewelry or stock, etc., and are not taxable.
3. So in case you have shown some amounts or assets as having been received at the occasion of your marriage, you may have to furnish the details of all the persons from whom you have received the gifts. Moreover, the tax official may call the person to appear before him and may try to find about genuineness of the gift.
4. Though gifts received by bride and groom are fully tax free in their hands on the occasion of their marriage but some clubbing provisions will come into play if these gifts are received from certain specified relatives. For example, income arising from the gift received by a daughter in law from her father in law or mother in law is required to be added to the income of the in-law who had given the gift.
