New Delhi: ITR Filing 2024 deadline on July 31, 2024, requires you to ensure that your documents are in order and your income tax filing is on track to avoid a penalty. While you may have gathered your Form 16, payslips, bank statements and more, do you know whether your gifts are taxable or not?
What are the types of gifts taxable in India
Taxpayers must declare gifts in the form of:
Cash
Gold
Real estate
Paintings
Other valuable items
These gifts must be declared under Schedule EI reflecting exempt income in your ITR.
How gifts are taxed
Cash gifts up to Rs 50,000 are exempted from taxation. Gifts above this threshold are taxable as other income. Let’s understand how gifts are taxed for movable and immovable property:
Immovable property
If the stamp duty on the immovable property exceeds Rs 50,000 without proper consideration, it will be taxed under the Income Tax Act. The difference between consideration and stamp duty will be taxed if it is above Rs 50,000 or 5 per cent. If this amount is Rs 2,50,000, then the taxable difference will be Rs 2 lakh.
Movable property
Movable property such as equity, jewellery, and paintings among other such assets are taxable at fair market value. If the gift of jewellery lacks consideration then the complete value of the gift will be taxable. If you pay a consideration of Rs 1 lakh for jewellery worth Rs 2.50 lakh, then the taxable amount will be Rs 1 lakh. Taxpayers must mention details of movable or immovable property received as gifts in forms ITR 2 and 3.
How your wife can help you save tax
How to report gift received from relative in ITR?
When gifts are received from one’s mother, father or other similar relative, or on the occasion of your marriage, then it is not taxable. These must be reported as income from other sources in the I-T return. However, gifts received in the form of inheritance from an uncle are taxable.
A relative is defined as follows:
Spouse
Brother
Sister
Spouse’s brother and sister
Parents’ brother or sister
Lineal descendant
Lineal ascendant
Gifts from employers are taxable on amounts equalling Rs 5,000 or more.
ITR filing 2024: If you have received expensive gifts such as jewellery, or immovable property such as real estate, know how these are taxed and under what conditions. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
