Diwali is not just a festival of happiness and lights, it is also a festival of gifts and bonuses, it can be said quite rightly, right? Most of the companies give gifts and bonus to their salaried employees on Diwali.
By the time of Diwali, employees are waiting for what gift they will get and how much bonus they will get, but there is one aspect, which we do not think much about, that is, whether our gifts are also taxed or what? Actually, it is true that whether your cash gift or Diwali bonus, it is taxed.
In fact, as per the definition of Income Tax Act, any property, whether it is cash, movable property or immovable property, taken without any prescription or receipt is called a gift and gift tax is levied on the gift.
Let us understand point wise
It is not that every gift received by you is subject to tax, there is some limit fixed on the amount above which you are subject to taxation.
Apart from this, there will be no tax on gifts received from close family members, such as parents, siblings and husband and wife.
But the cash gift or bonus received from the company comes under tax. But there is a limit on this that in a yearly year, its limit should not exceed Rs 5,000.
If you have received a gift or bonus up to Rs 5,000 in a whole year, then you will not have to pay any tax on it, but if it is more than this then you will have to pay tax on that amount.
Diwali bonus that your company gives you is considered a part of your salary and is kept in the tax net.
If we talk about gifts received from distant relatives and friends, then according to section 56(2) of the Income Tax Act, if the value of the gift received from them is going above the limit of Rs 50,000 per annum, then it will be taxed.
That is, gifts up to Rs 50,000 will remain out of the purview of tax. But if the total value of the gift goes beyond this, then the entire value of the gift will be taxed.
If an immovable property, such as land, has been given as a gift, then you have to pay tax on its stamp value. If the stamp value exceeds 50,000 and the condition is more than 10% of the stamp value, then you will have to pay tax on it.
There are some gifts on which no tax is levied. Gifts received in marriage do not come under the purview of taxation.
An inherited gift is also exempt from taxation.
At the same time, if the giver of the gift gives some gift to someone in anticipation of his death, then the receiver does not have to pay any tax on it.
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