Gift Tax: What's in a Gift?
The last thing that you want to think of while receiving a gift is about the tax implications of it.
The last thing that you want to think of while receiving a gift is about the tax implications of it. The Gift Tax has had a bit of a roller-coaster ride in India; with a brief period when it was abolished and then it getting renewed in a new avatar.
Gift Tax in India
Gift tax in India is governed under the Gift Tax Act constituted on April 1, 1958. As per the Gift Act 1958, all gifts in excess of Rs. 25,000, in the form of cash (including draft / cheque), received from one who does not have blood relations with the recipient, were taxable.
However, with effect from October 1, 1998, gift tax got demolished and all the gifts made on or after the date were free from tax. But in 2004, Gift Tax was again revived partially and a new provision was introduced in the Income Tax Act 1961 under section 56 (2). According to this,