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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tax Provisions for Special Cases

Under the Income-tax Act, 1961, which of the following is the general rule on the taxability of a gift of money received by an individual from a 'relative' as defined in the Act?

A gift of money received from a defined relative is not taxable in the recipient's hands, regardless of the amount. The Rs 50,000 aggregate threshold applies only to gifts from non-relatives, not to gifts from relatives.

  1. AIt is taxable at slab rates if it exceeds Rs 50,000 in the year
  2. BIt is not taxable in the hands of the recipient, irrespective of the amountCorrect
  3. CIt is taxable only if the donor is a non-resident
  4. DIt is taxable at a flat 30% if it exceeds Rs 1,00,000

Explanation

Gifts received from a 'relative' as defined in the Act are exempt from tax in the recipient's hands without any monetary limit. The Rs 50,000 aggregate threshold applies to gifts from non-relatives, so the first option wrongly applies it to relatives.

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