While certain gifts are taxable, you need to be careful with what you may think are seemingly harmless 'non-taxable' gifts
26-Dec-2022 •Shruti Agarwal
Did you know that a gift given to your relative is tax-free? Same is the case with a marriage gift. Below is a full range of gifts that can spare you from paying taxes.
These gifts are non-taxable
The gift could be anything, ranging from a fixed deposit to jewellery to real estate. (If you want to know more about how to save on tax, you must read this informative piece here).
But before you go bananas because you can save serious money in taxes, let us stop you for another minute or two and inform you how not to goof up on gifting. Yes, apart from dealing with the pressure of gift-giving, it is also important to know 'how to give a gift' to spare yourself the taxman's visit.
Gift may be tax-free, but income derived from it may not
The income earned from a gift is taxable in the hands of the recipient.
But in some cases, it can be taxable in your hands too. You may be liable to paying taxes even if you gift a home, fixed deposits, etc., to your family members.
Below are some scenarios where gifting may come back to bite you hard.
(You can read the same article mentioned above to understand what constitutes 'sufficient amount' in the eyes of the law).
Pro tip: You'd be spared paying tax if you gift your adult child (above 18) or if you receive a gift from your child, irrespective of their age.
Suggested read: Is a monetary gift received from parents taxable?
