How are gifts taxed in India? | Tax on gifted shares, gold and property

Income Tax Income from Capital Gains
61

Hey @mkv,

If the loan is given for business, then it has to be reported in the balance sheet. If its for personal use then no reporting is required. It won’t have any tax implication, as tax is already paid by you.

Hope this helps!

62

please clarify
father gives me money of 160000

i mansion this money under section 56 (2 )(x) on my ITR

Now my itr was processed

I don’t know this the right section 56 2 x to disclose that money

Can you please clarify

If did it wrongly what are penalty for this

64

Section 56 (2) (x) is where you mention gift amounts that are taxable.

As you have received the money from your father, it’ll be treated as a gift, however, you don’t have to pay any tax on it. This amount needs to be mentioned under ‘exempt income’ in your ITR.

But, as you have already filed the ITR now and the due date to file the revised ITR has also passed, there are no changes that can be made from your end.

As the income was not taxable, there will be no penalty in this case.

1 Like
65

In case, my minor child receives shares of worth 5 lacs as gift from my close friend and in the same year I received 50000 rs in cash as gift,
1)what will be my tax liability?
2)Gift to my child will be clubbed to me?
3) How is this gift reported to tax department?
4) how to file income tax return of minor?

66

Hi @hirendabhi,

Let me resolve the questions one by one:

  1. What will be your tax liability?
  • Since cash gifts up to ₹50,000 in a financial year are exempt, your cash gift won’t be taxable.
  • However, the shares received by your minor child will be taxable since they are from a non-relative and exceed ₹50,000 in value.
  1. Clubbing the gift income of the minor child:
  • Since your child is a minor, the gift’s value and any income earned from those shares (like dividends or capital gains) will be clubbed with your income.
  • If both parents earn, it is clubbed with the parent whose income is higher.
  1. How is this gift reported to the tax department?
  • The gift should be disclosed under 'Exempt Income in your ITR (even if not taxable).
  • If the shares generate income (like dividends), that income will be shown as per the clubbing provisions under Schedule SPI in your ITR.
  1. How to file an Income Tax Return (ITR) for a minor?
  • Generally, a separate ITR for a minor is not needed since their income gets clubbed with the parent’s income.
  • However, if the minor has earned income due to their own skills or talent (like acting, singing, etc.), they may need to file a separate ITR.
67
  1. My daugther ( 3 years old) got shares worth Rs 60,000 from my friend. Is it taxable. Do I as a guardian have to pay that?
  2. If she gets Rs 50,000 worth shares from 3 friends in a financial year, then once sold, are these taxable . If taxable, should I as a father have to pay those taxes?
68

Hello @Patl_Pel

Yes, if shares are received from a non-relative, and the total value exceeds ₹50,000 in a financial year, the entire amount is taxable under “Income from Other Sources” as per Section 56(2)(x) of the Income Tax Act.

Since your daughter is a minor, the gifted amount and any income from it (including capital gains upon sale of shares) will be clubbed with the income of the parent who has the higher earnings under Section 64(1A). Thus, any tax liability arising from these shares will be payable by the parent.

69

Hi,
My elder brother gifted shares to my wife using off market share transfer.
Should my wife show it in Schedule (Exempted Income) section of ITR-2 form while filing for her income tax for FY 2024-2025.

Please let me know . Thanks in Advance

70

Hey @mmandke ,

Gift received from spouse’s brother is exempt from income tax. She can report the value of the shares received under the schedule exempt income as Gift income.

71

Thank you for the response . Is it optional to mention the Gift Income from relative on schdeule expempt income or it is mandatory or it is advisable ?

72

@mmandke

Gifting of shares is a case of off-market transfers. These transactions can get reflected in AIS.

Thus it is advisable to report this as exempt income.

73

Yes. They are reflected in AIS already.
Thanks for Advice.

1 Like
74

Hi,
This video and vlogs is very useful.
I have one question, I have a huf account members are wife and child. If my mom give gift of 7 Lacks to my huf account every year is it tax free ?