Tax on Gifts in India: ₹50,000 Rule, Relative Exemptions and Property Gifts

India does not have a separate gift tax on every gift. Instead, the recipient may have to include certain gifts in taxable income. The result depends on what was received, its value, who gave it and why it was given.

For gifts received up to 31 March 2026, the relevant provision is Section 56(2)(x) of the Income-tax Act, 1961. It applies to income for FY 2025-26, reported for AY 2026-27. For gifts received from 1 April 2026, the Income-tax Act, 2025 applies. The corresponding provision is Section 92(2)(m), with exemptions under Section 92(3). The new Act uses “Tax Year” rather than “Financial Year” and “Assessment Year.”

The main ₹50,000 threshold and exemptions for gifts from specified relatives, marriage and inheritance continue under the new Act. Use the law and return utility for the year you received the gift.

What kinds of gifts can be taxable?

The gift rule may apply when a person receives:

• Money without consideration, such as cash, a bank transfer or a cheque;
• Immovable property without payment or for less than its stamp duty value; or
• Specified movable property, such as shares, securities, jewellery, artwork, bullion or a virtual digital asset, without payment or for less than its fair market value.

Taxable gift income is generally reported under “Income from Other Sources.” A gift from an employer may instead be treated as salary or a perquisite. An ordinary movable item, such as a car, is not on the specified-property list for this particular gift rule.

The ₹50,000 rule for money gifts

Add together the non-exempt money gifts you receive during the relevant year. If their aggregate is more than ₹50,000, the entire aggregate—not only the amount above ₹50,000—may be taxable.

For example, if you receive ₹30,000 from one non-relative and ₹25,000 from another, the total is ₹55,000. If no exemption applies, the full ₹55,000 may be taxable. If the total is exactly ₹50,000, it does not exceed the threshold.

The threshold is not a separate allowance for each donor or each transfer. Small transfers can add up to cross it. Money received from a specified relative is generally exempt and should not be treated as taxable merely because the total bank credits exceed ₹50,000.

Which gifts from relatives are exempt?

A gift from a person who meets the statutory definition of “relative” is generally exempt from this gift-income rule, regardless of its value. The legal definition is narrower than everyday use of the word “relative.”

For an individual, specified relatives generally include:

• Spouse;
• Brother or sister;
• Brother or sister of the spouse;
• Brother or sister of either parent;
• Lineal ascendants and descendants, such as parents, grandparents, children and grandchildren;
• Lineal ascendants and descendants of the spouse; and
• Spouses of relatives in the specified categories.

For a Hindu Undivided Family (HUF), a member of the HUF is treated as a relative for this purpose.

A cousin, nephew, niece or step-sibling is not automatically a specified relative. An uncle or aunt who is a brother or sister of a parent is included, but a cousin is not. Check the statutory relationship before treating a substantial gift as exempt.

Example: gift from a relative and a friend

Suppose you receive ₹2 lakh from your mother and ₹40,000 from a friend. The gift from your mother is generally exempt under the relative exemption. If you received no other non-exempt money gifts that take the yearly aggregate above ₹50,000, the ₹40,000 from your friend does not cross the threshold.

Keep evidence of the source of each transfer. A bank entry alone may not establish whether money was a gift, a loan, repayment or another type of receipt.

Other important exemptions

Money or property may also be outside the gift-income rule if it is received:

• On the occasion of the recipient’s marriage;
• Under a will or by inheritance;
• In contemplation of the death of the payer or donor;
• From a qualifying local authority or specified fund, institution or registered non-profit organisation; or
• Through certain transactions specifically excluded by the Act.

The marriage exemption relates to the marriage of the person receiving the gift. A birthday, anniversary, festival or housewarming is not automatically an exempt occasion. A gift from a friend on your birthday may still be taxable if your non-exempt money gifts exceed ₹50,000. A gift from a specified relative may be exempt because of the relationship, even if it is given on a birthday.

The inheritance and will exemptions relate to the nature of the receipt. Keep the will, probate or succession documents where relevant, together with records identifying the asset or amount received.

Tax treatment of property gifts

The value used for an immovable-property gift is generally its stamp duty value, not the donor’s cost or a value stated in a private gift letter.

For an immovable property gift without payment, the ₹50,000 threshold is applied to the relevant property transaction. If the value crosses it, the full stamp duty value—not just the amount above ₹50,000—may be taxable.

Example: property received as a gift

Suppose you receive a property as an outright gift from a friend, and its stamp duty value is ₹30 lakh. If no exemption applies, the amount potentially taxable under the gift rule is ₹30 lakh. If the property is received from a specified relative or under a will, the relevant exemption may apply. Keep documents that support the transfer and exemption.

Example: property bought below stamp duty value

Suppose the consideration is ₹90 lakh and the stamp duty value is ₹1 crore. The difference is ₹10 lakh. Ten per cent of the consideration is ₹9 lakh, which is higher than ₹50,000. Since the ₹10 lakh difference exceeds ₹9 lakh, it may be taxable in the buyer’s hands.

If the difference is not more than the higher threshold, this gift rule generally does not tax it. That does not settle other questions, such as stamp duty, registration costs or the seller’s tax consequences.

If the agreement date and registration date differ, a specific rule may allow the stamp duty value on the agreement date to be used when consideration was paid through a specified banking or electronic mode on or before that date. Keep the agreement and payment evidence. If you believe the stamp duty value is significantly higher than the property’s fair market value, check the prescribed valuation process and retain valuation evidence.

Gifts of shares, jewellery, bullion and other specified assets

The rules also cover specified movable assets, including shares and securities, jewellery, archaeological collections, drawings, paintings, sculptures, works of art, bullion and virtual digital assets.

If specified movable property is received without consideration and its aggregate fair market value exceeds ₹50,000, the entire aggregate value may be taxable unless an exemption applies. If it is bought for less than fair market value, the difference may be taxable when it exceeds ₹50,000. The applicable valuation and aggregation rules depend on the property and transaction.

An exempt gift today may still matter if you sell the asset later. A later sale can trigger capital gains tax under the rules for gifted or inherited assets. Keep the donor’s purchase records and the gift or inheritance documents. TaxClear’s property capital gains guide explains how property gains may need to be reported.

Gifts to a spouse, child or HUF

A gift to a spouse or child may be exempt from the gift-income rule because of the relationship. However, income earned from the transferred asset can be subject to separate clubbing provisions. For example, interest earned on money gifted to a spouse may be clubbed with the donor spouse’s income.

Income generated from an asset transferred to a minor child can also be subject to clubbing rules, with specific exceptions. A gift to an HUF should be documented and assessed based on the HUF’s facts and applicable rules. Exemption on the initial gift does not automatically determine who reports income later generated by that gift.

How to report a taxable gift in your ITR

A taxable gift is generally reported under income from other sources in the return utility for the year in which it is received. A gift exempt under this rule is not taxable gift income, but keep supporting records in case the source or nature of the receipt is questioned.

For FY 2025-26, use the AY 2026-27 return and applicable instructions. For gifts received from 1 April 2026, use the return utility and schedules for Tax Year 2026-27 under the new Act. Check the current form’s “Income from Other Sources” field rather than relying on screenshots or labels from an earlier year.

Before filing:

• Add together non-exempt money gifts from all donors;
• Check whether the asset was gifted or transferred for consideration;
• Verify the stamp duty value or fair market value where relevant;
• Confirm whether the donor is a statutory relative;
• Reconcile taxable receipts with bank, broker and property records; and
• Keep evidence supporting any exemption claimed.

TaxClear’s online ITR filing guide explains the filing and verification process.

Records to keep

Keep documents that show what you received, from whom and why:

• Bank statements and transfer details;
• A written confirmation or gift deed for a substantial gift;
• Proof of the donor’s identity and your relationship;
• Marriage, will, inheritance or succession records, where relevant;
• Property gift or sale deed, stamp duty valuation and payment evidence;
• Valuation or acquisition records for shares, jewellery, bullion or other specified assets; and
• The ITR acknowledgement and calculation of any taxable amount.

A written gift document can help explain a substantial transfer, but it does not by itself create an exemption. The facts must meet the legal conditions. Large cash gifts may also be subject to separate cash-receipt restrictions, so use a traceable transfer and check the applicable rules.

Frequently asked questions

Is a cash gift of ₹50,000 taxable?

The rule applies when the aggregate of non-exempt money gifts exceeds ₹50,000. Exactly ₹50,000 does not exceed the threshold. If the aggregate is higher and no exemption applies, the entire aggregate may be taxable.

Does a gift from a friend count as tax-free?

A friend is not a specified relative under this rule. Add money gifts from all non-exempt sources during the year. If the aggregate exceeds ₹50,000, the entire aggregate may be taxable.

Is a gift from a cousin exempt?

A cousin is not a specified relative under the statutory definition. If no other exemption applies, the general threshold and gift rules may apply.

Is property received from parents taxable?

A gift from a parent is generally exempt under the relative exemption. Keep evidence of the relationship and transfer. A later sale of the property may have separate capital-gains consequences.

Is the ₹50,000 limit per gift or per year?

For money gifts, add the non-exempt amounts from all donors during the year. Different valuation and aggregation rules apply to property, depending on whether it is immovable or specified movable property.