Gift from non relative – Query?

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Query – 

respected Sir,
my daughter has turned 18 recently. on her birthday she has received gifts from non relatives ( actually they are relatives but not as per i.t. act ) amounting to rs. 60000/-
please advice how to show this amount in i.t. return??
how tax she will be required to pay on same?? whether tax amount will be different if has taxable income? or below taxable income during this f.y.

Gift on Birthday- Taxable or not under

 Income Tax Act 1961?

Issue:  Whether Gift received from non relative on the occasion of birthday taxable under Income Tax Act 1961?

Provision : Sec 56(2)(X) of Income Tax Act 1961 speaks about tax liability in case of any sum received without consideration exceeding Rs 50000 is taxable under the head income from other sources.

Further it also covers any immovable property received without consideration where the stamp duty value/ fair market value exceed Rs 50000.

Further it also covers following movable property without consideration where fair market value exceeds Rs 50000:

  • Shares and securities
  • Jewellery
  • Archaeological collection
  • Drawings
  • Paintings
  • Sculptures
  • Any work of art
  • Bullion

 

Sec 56(2)(X) is not applicable in the following cases :

  1. Gift received from relative.
  2. Gift received on occasion of marriage.
  3. Gift under will or inheritance.
  4. Gift in contemplation of death of the payer
  5. Money/property received from a local authority
  6. Money/property received from any fund/foundation/university/other educational institution/hospital/ medical institution/any trust/institution referred u/s 10(23C)
  7. Money/property received from charitable institute registered u/s 12AA.

 

Relative means as per Income Tax Act 1961:

1) Spouse of the individual
2) Brother or Sister of the individual
3) Brother or Sister of the spouse of the individual
4) Brother or sister of either of the parents of the individual
5) Any lineal ascendant or descendant of the individual
6) Any lineal ascendant or descendant of the spouse of the individual
7) Spouse of the person referred to in (2) to (6)

 

Conclusion: Thus gift from non relative received on the occasion of birthday above Rs 50000 is taxable under the Income Tax Act 1961 under the head income from other sources. Subject to condition that it fulfils all the condition of section 56(2)(X).

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