How to show gift income in ITR

Income Tax ITR Filing
1

In the ITR form, where exactly can we show the Gift income received from blood relatives? If shares were gifted, should the FMV of the share be considered and shown?

Thanks!

2

Yes @tarun,

You’ll have to report FMV of shares under schedule EI (exempt income) while filing the ITR.

3

I have gifted shares worth Rs. 8 lakh to my mother. I would like to understand the following:

  1. Does she need to file an Income Tax Return (ITR) for receiving the shares as a gift?
  2. If yes, then while filing the ITR, does she need to provide any proof or documentation regarding the shares received from me as a gift?
4

Hello @Ashokk ,

It is always recommended to file your income tax return. She is not required to file the ITR as per income tax act but since she received some shares as gift this year, it can be disclosed as exempt income in her ITR. She does not need to pay any tax on the same.

5

Thank you so much for your prompt and helpful response regarding the filing of the ITR for the gifted shares.
I have a few further questions:

  1. Does my mother need to provide any proof for the receipt of these gifted shares when disclosing them as exempt income in her ITR?
  2. If proof is required, should we keep any documentation for the gifted shares in the future?
    Should the proof be in the form of a simple handwritten statement, an email, or any legal document (such as an affidavit)?

We would like to ensure that we maintain the correct records for the gifted securities in case of any future need. Looking forward to your guidance on this.

6

Firstly, your mother does not need to provide any proof while filing the ITR.

I would also recommend that you keep records of all such transactions, in case if you or your mother receive any notice or query from the income tax department regarding this gift of shares. The records could include the details of the gift transaction you executed through your broker.

Also, in India, a written gift deed is not mandatory for the valid transfer of movable property, such as money. The transfer is considered complete once you take possession of the gift. However, you can execute a gift deed if you need legal proof of the transfer.

7

Thank you so much for your helpful response.

1 Like
8

What is the treatment for 'Capitalised value of pension" and Gratuity in Tax return

9

Hello @Ashokk ,

Gratuity can either be taxable or exempt based on certain conditions. To understand the same you can click here.

You need to report the taxable amount of gratuity under “Income from Salary” and the exempt amount needs to be disclosed under the schedule “Exempt Income”.

Also, can you please elaborate on the term “Capitalised value of pension” to be able to understand and help you with a solution?

10

How to update previous year ITR US139(8A)

11

When filing your Income Tax Return (ITR), gift income must be reported under “Income from Other Sources” if it exceeds ₹50,000 in a financial year (except from relatives). Exempt gifts, like those from close family, should be declared for transparency. Use Form 10E for exemptions and ensure proper documentation.