Receiving gifts from relatives can be a joyful experience, but it’s important to understand the tax implications and disclosure requirements when filing your Income Tax Return (ITR). In this 2025 guide, we’ll cover:
- Taxability of gifts under Income Tax Act
- Who qualifies as a “relative” for tax exemption?
- ITR disclosure rules for gifts
- Recent changes in 2025
1. Are Gifts from Relatives Taxable in India?
Under Section 56(2)(x) of the Income Tax Act, gifts received from relatives are not taxable, regardless of the amount.
Who is Considered a “Relative”?
As per Income Tax Act, relatives include:
- Spouse
- Parents & Siblings (Brother, Sister)
- Spouse’s Parents & Siblings
- Lineal Ascendants & Descendants (Grandparents, Grandchildren, etc.)
- Brother/Sister’s Spouse
Non-Relatives (Friends, Colleagues, Distant Cousins) – Gifts above ₹50,000 are taxable.
2. Tax Rules for Gifts from Non-Relatives (2025 Update)
If you receive gifts from non-relatives, the following tax rules apply:.
Type of Gift | Tax Rule (FY 2024-25) |
Cash/Gift ≥ ₹50,000 | Taxable as “Income from Other Sources” |
Property/Gold/Jewellery | Fair Market Value (FMV) taxed if above ₹50,000 |
Gifts on Marriage | Fully Exempt (No limit) |
Inheritance/Will | Not Taxable (Even from non-relatives) |
Note:
- Multiple gifts from the same person in a year are clubbed for the ₹50,000 limit.
- Gifts via UPI/Bank Transfer must be disclosed if above ₹50,000.
3. How to Disclose Gifts in ITR (2025)?
If Gift is from a Relative → No Disclosure Needed
Since it’s tax-free, you don’t need to report it in your ITR.
If Gift is from a Non-Relative (Taxable) → Must Report in ITR
- ITR Form: Schedule OS (Income from Other Sources)
- Mention:
- Name & PAN of gifter (if available)
- Amount received
- Nature of gift (Cash/Property/Other assets)
4. Recent Changes in 2025 (Gift Taxation Updates)
- Stricter AIS (Annual Information Statement) Tracking – All high-value transactions (including gifts) are auto-reported.
- Digital Gift Vouchers– Now treated as “cash equivalents” if above ₹50,000.
- Foreign Gifts– Must be reported under Foreign Asset Disclosure (Schedule FA) if received from NRIs/foreign relatives.
5. Common Mistakes to Avoid
- Assuming all gifts are tax-free (Only relatives are exempt).
- Not reporting taxable gifts (≥₹50,000) in ITR.
- Mixing business gifts with personal gifts (Business gifts may attract GST).
6. Conclusion:
✔ Gifts from relatives → No tax, no ITR disclosure.
✔ Gifts from non-relatives (≥₹50,000) → Taxable (Report in ITR).
✔ Marriage gifts & inheritance → Always tax-free.
✔ Check AIS for pre-filled gift data before filing ITR.