Tax Query: Taxation aspects on gifts received
Please clarify the taxation aspect in the following instance: An assessee earns monthly salary of ₹15,000. He has no other source of income. During FY 23-24, he received a gift of ₹1 lakh from his friend. The said amount was given by other than cash mode. Is he liable to pay Income tax?
T.R. Bhave
Gifts received by an individual are exempt from taxation provided they are given either by relatives or on the occasion of marriage. As a result, gift of ₹1 lakh received from a friend is taxable provided it’s not on the occasion of wedding.
Technically, tax filing would arise when the total income is more than ₹2.5 lakh (old tax regime) or ₹3 lakh (new tax regime) for the financial year 2023-24. Considering that the salary of the individual for FY 2023-24 is ₹1.8 lakh, with no other income, the individual will not be required to pay any tax (when read with section 87A to claim rebate), as the total income is ₹2.8 lakh (₹1.8 lakh of salary income and ₹1 lakh gift).
The author is Partner, Deloitte India
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