SEO Sai Gr. Hosp.
210774 Points
Joined July 2016
In my career of about 45 years, I have seen three modules of taxability of Gift.
Earlier days, gift tax liability was on DONOR.
From 1998 to 2004, in the second phase, Gift tax was totally abolished.
Because of its misuse, It was re-introduced in 2004, but now the tax liability was over DONEE; or gift receiver.
At present, gift tax is covered under section 56(2) of the Income Tax Act, 1961. The Act provides that any gift received in excess of Rs.50,000 in form of cash, demand draft, cheque or specified assets by an individual or Hindu undivided family (HUF) is taxable under the income tax head ‘income from other sources’. If the value exceedsRs.50,000, the whole amount is taxed.
So, you as a donor, has no tax-liability over the gift, if gifted after AY 2005-06.
If your relative falls under defination of IT section 56(2)(vI), as relative, for him Gift will be exempt or tax-free.