| Thursday, 29 September 2022 |
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Good morning [%first_name |Dear Reader%],
The festival season is here. And with it, the gifting season.
Gifts spread joy all around. The receiver’s happy. The giver’s happy. Even the taxman’s happy—because sometimes, in the case of higher-value gifts, the exchequer gets a share.
Don’t think that’s fair? Well, such is life and the Income Tax Act.
But there are a few hacks you can try if you don’t want to share your gift with the government.
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Cracking the gift-tax code
First, the rules.
If the value of gifts you receive in a financial year is more than Rs 50,000 (~US$600), there are tax implications. Whether that gift is in cash or kind.
If that limit has been crossed, you have to include these gifts under ‘income from other sources’ in your tax filings and pay tax on them.
Say you get a gift from friend A that’s valued at Rs 30,000 (~US$360) and another from friend B that’s worth Rs 25,000 (~US$300).
