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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Mr. Raghav Iyer received Rs 40,000 as a gift in cash from a friend (not a relative) on his birthday, and no other gifts during the year. Under the general gift-taxation rule for money received without consideration by an individual, how is this treated?

The gift is fully exempt. Gifts received without consideration from non-relatives are taxable only when the aggregate in the year exceeds Rs 50,000. Since Rs 40,000 is below that threshold, no part is taxed, and no registered deed is needed for cash gifts.

  1. AFully exempt because it is below Rs 50,000 aggregate in the yearCorrect
  2. BTaxable at Rs 40,000 only on the amount above Rs 25,000
  3. CTaxable as Rs 40,000 under capital gains
  4. DExempt only if the gift is received through a registered deed

Explanation

The aggregate of money or specified property received without consideration from non-relatives is taxable only if it exceeds Rs 50,000 in the year. Rs 40,000 is within the limit, so nothing is taxable. If the limit were exceeded, the entire amount would be taxable, not just the excess.

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