How much money can you gift tax free to a family member tax free in India?

Short Answer

There is no limitations on the amount of money that can be gift tax free to a family member in India. But, it is essential to check rules and regulations for whom does the clauses apply and whether all kinds of gifts are allowed or not.

Detailed Answer

When it refers to gift taxation, not all gifts are subject to Tax in India, but any gift valued at more than INR 50,000 is taxable, regardless of the nature of the gift.

When a donation exceeds INR 50,000, it becomes taxable under the definition of "Income from other sources" at the administration's standard rate of tax. In India, there is a tradition of gifting some kind of present on multiple events such as Diwali, Holi, Birthdays, Raksha Bandhan, Christmas, Eid, and so on, and it is crucial to remain aware of the types of gifts that should be given and the amount of gifts that should be given. Gift law, 1958, imposes a tax on the individual who accepts the present.

The legislation applies to all gifts worth more than INR 50000, regardless of the nature of the gift, and all immovable goods are considered liable to tax under Stamp Duty. It is also vital to find out what goods are excluded from taxes and how they compare to one another. These limitations vary depending on the event, commodity, and method of gift exchange.

When it comes to exemptions, the presents are tax free if they are gifted by the following people:

  1. An individual’s Spouse.
  1. The individual's brother or sister.
  1. The individual's spouse's brother or sister.
  1. The individual's brother or sister from one of his or her parents.
  1. Every descendant or lineal ancestor of the individual.
  1. Any lineal descendant or descendant of the individuals' spouse.

It is even considered clever to give the gifts under the name of these about relational categories to be aware of all the taxes and also be tax-free at the same time. To be precise, they effectively produce tax-free income while also lowering the overall tax burden.

Hence, the investments made in the name of parents and close relatives will help you save money on taxes and even earn tax-free internet income. In case your parents are senior citizens that is both of your parents are over 60 years old, then they would be eligible for a basic tax exemption of INR 3 lakh, and in case the parents or close relatives have an age above 80 or they can also be called as super senior citizen, the sum is INR 5 lakh.

These are some of the cases about which individuals should be aware and clever about whenever they gift anything to their loved ones. It is believed that the level of income is also a topic of concern when it comes to gifting presents and it is also a saying that if the income of the person is high then the gift, they give to their relatives is also highly priced.

In case of the situation when your very close relatives who come under tax exemption status have low income i.e., below INR 5 lakh then they are exempted to pay any sorts of tax for it.

Tagged With: gifttax freemoneyIndiagift tax free
Categories: Finance
Ask your query and our expert community would be happy to help
Discussion (0)
Related FAQs

What are tax implications on money transfer from USA to India?

To understand the tax implications for sending money, it is important to know where the individual is sending the money and for what purpose. As these implications depends on these factors and plays a huge role.

How much money can NRI transfer to India in one year?

There is no limit on the amount that can be transferred to India by NRIs. There are certain criteria for being an NRI so it is important to check whether you are considered to be NRI or not. For further details, read through the details ahead.

How much money can be remitted from India?

Remittance plays a huge role in Indian economy as India is the highest receiver of remittance. In 2020, India received USD 83 Dollar as remittance. Therefore, the maximum amount of money that can be remitted from India is USD 2,50,000.

How much money can we keep in savings account in India?

Savings bank account is one of the most popular banking services. There is no maximum amount of money that needs to be maintained. A person is liable to keep any amount of money in the savings bank account.

How much money do I need to start Stock Trading in India?

Its all based on the share you wish to purchase. You can invest one rupee or two rupees in the stock market while there is no maximum cap on your investment.

Is gift income taxable in India?

Yes, gifts are taxable if they are worth more than INR 50,000 but exemptions are also there, so it is necessary to study them if you are planning to gift something. Also the relation you share with the person plays an important role.

What is a tax deduction in India?

The people of a country pay taxes to the government based on what they earn. However, if you want to reduce your tax, then there are specific ways in doing so. Tax deductions help taxpayers reduce their tax liability towards the government, enabling them to take home more of their earned money.

Is NRI money taxable in India?

NRI money is taxable in India under certain circumstances usually when the income is earned in India. There are also many deductions and exemptions available. For further details read the long form with description.

Where to invest money for good returns in India? High Return Investments

We all look to earn good returns on the money we invest. Putting money in High return investments is one way of generating better income. The different places to get good returns are mutual funds, equity, and gold investment in India.

What are the tax implications on investments done outside of India?

Every Equity Investor should maintain some part of their portfolio diversified into foreign companies. This can be achieved through Foreign brokers or Mutual Funds and ETFs that invest in abroad markets. Investing abroad has many benefits such as exposure to the top global companies like Facebook, Amazon, Ford, etc. The tax implications on investments made outside India are different as foreign Equity is taxed as Debt Mutual Funds