A Gift is a voluntary transfer of property from one person (being the ‘Donor’) to another (being the ‘Donee’) where full value of consideration is not received in return.
Any sum of money or any property which is received without consideration or for inadequate consideration (in excess of Rs. 50,000) by any person shall be chargeable to tax in the hands of the of the Donee i.e. recipient of the Gift in the following manner in India under the head ‘Income from Other Sources’:
Points to Remember:
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Currently, (subject to certain conditions) there is no Gift tax applicable in India. Several countries however, levy Gift tax on either the Donor or Donee. For E.g.: In the US, Gift is taxed in the hands of the Donor (person giving the Gift), subject to certain exceptions and deductions. In this regard, a NRI shall also have to keep in mind the tax implications and reporting requirements of giving / receiving Gifts in his / her country of Residence.