{"id":39906,"date":"2020-11-15T14:33:00","date_gmt":"2020-11-15T09:03:00","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=39906"},"modified":"2020-11-28T17:59:45","modified_gmt":"2020-11-28T12:29:45","slug":"the-implication-of-income-tax-on-the-gift","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/the-implication-of-income-tax-on-the-gift\/","title":{"rendered":"The Implication of Income tax on the Gift"},"content":{"rendered":"

India as a country follows the joint family structure system and has so many festivals to be celebrated owing to the diverse religions, customs and cultures. There are numbers of occasions in which the gifts are exchanged between the families. In fact, gifting each other signifies affection and love between the families and with that is also symbolized as the social status.<\/p>\n\n\n\n

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However, numerous of times gifts can also be an integral part of tax evasion\/ tax planning. While tax evasion is prohibited and can attract penal provision, tax planning is completely legal and can be done under the framework of the law.<\/p>\n\n\n\n

Earlier law regarding Tax on the gift in India<\/h2>\n\n\n\n

The government of India has introduced Gift Tax in April, which is regulated by the Gift Tax Act, 1958<\/strong>[1]<\/strong><\/a><\/sup> (GTA). The main aim of the government to implement this law is to impose a tax on receiving and giving gifts under various circumstances. All the gifts in a form of blank cheques, demand draft, cash, or anything are covered under the act. However, the gift tax was abolished in October 1998 and all tax on<\/a> the gift<\/a><\/strong> was nil. Provided that the tax on the gift was reintroduced in a new form and also included in the provisions under the Income Tax Act in 2004.<\/p>\n\n\n\n

It is very important to have a basic understanding of the taxation on gifts in India to dodge any unplanned\/ ignorant tax outflows.<\/p>\n\n\n\n

Present law regarding Tax on the gift.<\/h2>\n\n\n\n

As per the present law, which was amended in the year 2017, any gift received by any persons taxed in the hand of the receiver comes under the category of ‘Income from other sources’ at normal tax rates<\/a><\/strong>. There are a number of gifts that come under the ambit of taxation.<\/p>\n\n\n\n

What is a Gift?<\/h2>\n\n\n\n

According to the income tax act, gift includes:<\/em><\/strong><\/p>\n\n\n\n

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