The taxability of gifts is always a matter of concern, every person wants to know about the taxability provisions that will be applicable to him while receiving gifts from his near and dear ones. So let us first consider what is considered a gift under the provisions of the Income Tax Act, 1961.

As per the taxability provisions, gifts can be classified as follows-

• Any amount received without consideration is called a ‘monetary gift’.
• Specified movable property received without any consideration is called ‘gift of movable property’.
• Specified movable property received at a lower cost is called a ‘gift of movable property for inadequate consideration’.
• Immovable property received without any consideration is called ‘gift of immovable property’.
• Immovable property acquired at a low cost is called ‘gift of immovable property for inadequate consideration’.

Taxable provision for monetary gifts received by HUF:

If the amount received by way of gift from HUF without any consideration exceeds Rs.50,000/-, such amount will be taxable in the hands of the recipient.

Provided that, monetary gift received by HUF shall not be charged to tax if:

• Wealth is received from relatives.
• Wealth is received under a will or through inheritance.
• Wealth is received in contemplation of the death of the donor or the donor.
• Funding is received from the local authority.
• Money received from any fund, foundation, university, other educational institution, hospital or other medical institution, trust or institution.
• Money received from any trust or institution registered under section 12AA or section 12AB.
• Shares are received as a result of any corporate action being taken in the company.

provided that, HUF. relatives of For this purpose any member of the HUF is meant.

Taxable Provisions for Movable Property Received by HUF:

• Assessed movable property received without consideration

If the total fair market value of the gifted movable property received by the taxpayer during the year exceeds Rs. 50,000/-, the value of movable property is charged to tax.

Provided that, movable property means shares/securities, jewellery, archaeological collections, paintings, paintings, sculptures or any work of art and bullion as capital asset of the taxpayer.

• Assessed movable property received for inadequate consideration:

If, the aggregate fair market value of the gifted movable property acquired by the taxpayer during the year exceeds the consideration paid for these properties by Rs. 50,000/- will be charged to tax on the assessed movable property.

Provided that the movable property received by the HUF Will not be charged to tax if:

• Movable property is received from relatives.
• Movable property is received under a will or as an inheritance.
• Movable property is acquired in contemplation of the death of the donor or the donor.
• Movable property is obtained from the local authority.
• Movable property received from any fund, foundation, university, other educational institution, hospital or other medical institution, trust or institution.
• Movable property received from any trust or institution registered under section 12AA or section 12AB.

Provided that, for this purpose a relative of the HUF means any member of the HUF.

Taxability provisions for immovable property acquired/acquired by HUF:

• Assessed immovable property received without consideration

Immovable property received without consideration is a capital asset received by a HUF whose stamp duty value exceeds Rs. 50,000 is taxed.

• Assessed immovable property received for insufficient consideration

An immovable property received for inadequate consideration is a capital asset received by a HUF, the consideration for which is less than the stamp duty value and the difference exceeds Rs. 50,000 and 10% consideration, such immovable property will be taxed.

Provided that, immovable property acquired by a HUF shall not be charged to tax if:

• Movable property is received from relatives.
• Movable property is received under a will or as an inheritance.
• Movable property is acquired in contemplation of the death of the donor or the donor.
• Movable property is obtained from the local authority.
• Movable property received from any fund, foundation, university, other educational institution, hospital or other medical institution, trust or institution.
• Movable property received from any trust or institution registered under section 12AA or section 12AB.

Henceforth, the taxable provisions for gifts made by a member to HUF are tax-free as they are covered under the provisions of the Income Tax Act, 1961, with the exception of the taxable provisions for gifts.

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