Gift Tax Rules: Is Your ₹50K Gift Fully Taxable?

Indian tax law exempts gifts between married spouses completely, but gifts above ₹50,000 from friends or non-relatives are taxable as income. A Karnataka HC petition is now challenging whether this exemption should extend to same-sex couples too.

Here's what happened: Under Section 56(2) of the Income Tax Act, gifts received from a spouse are fully exempt from tax — no upper limit applies.. Gifts received from non-relatives exceeding ₹50,000 in a financial year are added to your income and taxed at your applicable slab rate.. A same-sex couple has petitioned the Karnataka High Court, arguing this spousal exemption discriminates against them since their union lacks legal recognition in India..

What you should do: Track all monetary gifts received in a year — anything above ₹50,000 from friends or non-relatives must be declared in your ITR under 'Income from Other Sources'.. If you receive large gifts from relatives (parents, siblings, spouse, in-laws), confirm they fall under the defined 'relative' list in the IT Act to claim exemption safely.. Consult a tax advisor before transferring large sums as gifts within a household — clubbing provisions can apply if income from gifted money is earned by the original giver..

Gifts received on your wedding day are fully tax-free regardless of amount or who gives them — even a ₹5 lakh gift from a friend is exempt if received on your marriage date.