Income Tax efiling: Received gifts during the year? Here is what that means for your ITR – Financial Express

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  • By Taxmann
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  • Last Updated on 27 October, 2020
(By CA Naveen Wadhwa, DGM, and CA Tarun Kumar, Assistant Manager, Taxmann.com)
 
Earlier gifts were given only on important occasions. Now gifts are used as a tool for income-tax planning. There are several events when we receive gifts from our family members or friends. Many people believe that the gifts received out of love and affection are exempt from tax and don’t disclose the same in the income tax return (ITR). However, this isn’t the correct trend.
 
Gifts are taxable under the Income Tax Act, unless they fall under the category of exemption. Hence, gifts should be duly disclosed in ITR and taxes should be paid on them if they aren’t exempt in the hands of receiver. The non-disclosure of gifts may attract penalty which ranges from 50% to 200% of tax payable on income sought to be evaded.

 

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