Taxability of Gifts Received (Section 56(2)(x) of Income Tax Act, 1961)

If a person receives, in the previous year, from any person or persons (excluding the specified persons or occasions*) on or after 01/04/2017:


1. Receipt of money without consideration:

If the aggregate of all sums of money received by the person exceeds Rs 50,000, entire amount will be taxable under the head “Income from Other Sources”


2. Receipt of immovable property or any property other than immovable property without consideration:

3. Receipt of immovable property or any property other than immovable property with inadequate consideration:

However, section 56(2)(x)(b)(B) [Taxability of immovable property received with inadequate consideration], was substituted by the Finance Act, 2018, with effect from 01/04/2019 to provide the following relief:


The implication of the amendment is illustrated below:

* = Specified persons or occasions

If the gifts specified u/s 56(2)(x) of Income Tax Act, 1961 are received from below persons or occasions, then the gifts would not be taxable under the head “Income from Other Sources”


1. From relative **


2. On the occasion of the marriage of the individual


3. Under a will or by way of inheritance


4. In contemplation of death of the payer or donor, as the case may be


5. From any local authority as defined in the Explanation to clause (20) of section 10


6. From any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10


7. From or by any trust or institution registered under section 12A or section 12AA; or


8. By any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or


9. By way of transaction not regarded as transfer under clause (i) or 11[clause (iv) or clause (v) or] clause (vi) or clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb) or clause (vid) or clause (vii) of section 47; or


10. From an individual by a trust created or established solely for the benefit of relative of the individual.

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