There is no restriction on giving gifts to any person under the existing income tax laws of the country. However, in certain cases, various types of gifts are covered under the Income Tax Act, such as gifts to daughter-in-law and one’s spouse, income arising on account of transferred property are taxable. But to know the extent to which a father can gift his son, can a father gift his son by buying a flat, what the law says, we consulted income tax experts to know.
As per Indian tax laws, gifts received by an individual usually become taxable when the value of these gifts received within a year exceeds Rs.50,000. When the value of these gifts is less than Rs 50,000, then they are beyond the purview of tax.
It can be understood in such a way that if you get gifts up to Rs 50,000 in a financial year, then you will not have to pay any tax on it. Yes, if the value of the gift crosses the limit of 50 thousand, then tax will have to be paid on the entire cost. Suppose if you get gifts of 60 thousand rupees in a financial year, then 60 thousand rupees will be added to your income.
gifts from blood relations
However, there are some exceptions to these as well. Gifts worth more than Rs 50,000 in some cases are also tax free. Some of these include gifts received from special relatives. Like a father can gift his son or a son can gift his father any amount. These gifts are not subject to tax.
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Gifts received from relatives in income tax are exempted from tax. Gifts received from blood relatives including husband, wife, brother, sister, husband and wife’s siblings also come under the purview of tax exemption.
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There is no tax on any gift received at the time of marriage. Also, there is no tax to be paid on the gift received in inheritance or bequest. But gifts received from non-relatives on any occasion other than marriage such as birthday, anniversary, house muhurat etc. become taxable as soon as the limit of 50 thousand is crossed.
father son gift
According to Income Tax, a father can give a gift of any value to his son or a son to his father. This gift is tax free. No legal action is required for this gift. A simple paper can be signed by two witnesses giving information about mutual relation and gift. The recipient of the gift has to mention this gift in his income.
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Orignally published at Tailored Stash
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