Tax Tips: You may have to pay heavy tax in exchange for these gifts received on the occasion of Diwali...
Diwali festival is coming. People celebrate the festival of Diwali to share happiness. Many types of gift transactions are also done on the occasion of Diwali. People also distribute sweets to each other a lot. On the occasion of Diwali, people also receive some gifts. During this time, people should also be careful before accepting everyone's gift, because sometimes big and expensive gifts may have to be paid for.
According to the Income Tax Act, if any gift is received from relatives then it is not taxable. However, if a gift is received from another person, whose value is more than Rs 50 thousand, then tax will have to be paid on it. In ITR, such gifts will have to be declared under Income From Other Sources.
These people will be considered relatives-
- husband wife
- Siblings of husband or wife
- Siblings of parents
- a descendant of the spouse
Gifts received in these special programs will be considered tax-free
- a thing is given as per the will
- inherited thing
- Gift received from local administration
- Gift received from any educational institution under Section 10(23)
- Gift received from a charitable organization
Diwali is not included in these special programs. In such a situation, if on the occasion of Diwali or other than the events mentioned above, someone other than relatives gives you a gift whose value is more than Rs 50 thousand, then you will have to pay tax on it.