Page 51 - Banking Finance December 2022

FEATURES

Income tax on gifts: Gift received

from relatives is tax free

ndian festivals are incomplete without exchanging exceeds Rs. 50,000, then aggregate value of such gifts
I financial gifts such as shares, land etc. are exchanged
received during the year will be charged to tax.
gifts. A lot of gifts ranging from cash, gold, diamonds,
between friends and families. The gifts that you
receive might not always be tax free. You will be required Gifts exempt from tax
Gifts received from relatives are exempt from tax. by virtue
to pay taxes on them if the gift value exceeds Rs. 50,000.
of Section 56 of the Income Tax Act. According to the IT
Gifts received up to Rs. 50,000 are completely tax free but
Act, following persons would be considered as relative --
if this amount is breached, the whole amount of gifts become
spouse, brother or sister, brother or sister of the spouse,
taxable.
brother or sister of either of the parents, any lineal
ascendant or descendent, any lineal ascendant or
For an instance, if you have received Rs. 55,000 worth of
descendent of the spouse, spouse of the persons referred
gifts during a financial year, complete amount of Rs. 55,000
above.
will be taxable under the head ' income from other sources.'
Section 56(2) of the Income Tax provides for taxation of gifts
Friends do not come under 'relative' and any gifts received
received during the year in case aggregate value of all the
from them are taxable.
gifts, whether in cash or in kind during a year, exceed fifty
thousand rupees. Further, gifts received at the time of marriage are exempt
from tax. But, gift received on occasions like birthday,
The threshold amount of Rs. 50,000 applies to aggregate anniversary, etc. of an individual will be charged to tax.
of gifts received during a financial year. The taxability of the
gift is determined on the basis of the aggregate value of Gifts received under will/ by way of inheritance and gifts
gift received during the year and not on the basis of individual received in contemplation of death of the donor are also
gift. If the aggregate value of gifts received during the year tax free. (Source: Mint)

Forex reserves zoom $14.72 b to $544.71 b
India’s foreign exchange reserves skyrocketed by $14.721 billion in the week ended November 11 to $544.715 billion.
Experts say the RBI would have bought dollars during the reporting week as the greenback weakened on expectations
the US Fed would temper rate hikes due to the decline in October consumer prices.

In the reporting week, all four components of the reserves rose — foreign currency assets (up by $11.80 billion), gold
($2.639 billion), special drawing rights ($165 million), and reserve positions in the IMF ($116 million). Since March-end
2022, the forex reserves have declined by $62.594 billion.

BANKING FINANCE | DECEMBER | 2022 | 51