Section 56(2)(x) of Income Tax Act taxes the person who receives a gift: if money or property worth more than ₹50,000 comes in a year from people who are not relatives, the whole amount is added to income and taxed at your slab rate. Gifts from relatives, on your marriage, or by will or inheritance are fully exempt.
India has no separate gift tax on the giver. Giving to a charity is a different matter, a deduction for the donor, listed with other claims on the deductions hub. The tax sits with the receiver under income from other sources. This page covers FY 2025-26 under the 1961 Act; the provision moves to section 92 of the 2025 Act for tax year 2026-27. For the other items in that head, see the five heads of income.
Quick facts
Who pays
The person receiving the giftLimit
₹50,000 in total in a year from non-relativesAbove the limit
Whole amount taxed, not just the excessFully exempt
Relatives, marriage, will or inheritanceTax rate
Your normal slab rateHead of income
Income from other sourcesUnder the 2025 Act
Section 92
What section 56(2) of Income Tax Act taxes under clause (x)
| Type of gift | When it is taxable | Amount taxed |
|---|---|---|
| Money (cash, cheque, transfer) | Total from non-relatives in the year exceeds ₹50,000 | The whole sum received |
| Land or building, received free | Stamp duty value exceeds ₹50,000 | Stamp duty value |
| Land or building, bought cheaply | Stamp duty value exceeds the price paid by more than the higher of ₹50,000 and 10% of the price | Stamp duty value less price paid |
| Listed movable property received free | Fair market value of all such items exceeds ₹50,000 | Fair market value |
| Listed movable property bought cheaply | Fair market value exceeds the price by more than ₹50,000 | Fair market value less price |
Movable property here means a closed list: shares and securities, jewellery, bullion, paintings, drawings, sculptures, archaeological collections and other works of art. A car, a phone or furniture is not in the list, so receiving one as a gift is not taxed under this clause.
Section 56(2)(x) of Income Tax Act: who is a relative
- Your spouse.
- Your brother or sister, and your spouse's brother or sister.
- A brother or sister of either of your parents.
- Any lineal ascendant or descendant: parents, grandparents, children, grandchildren.
- Any lineal ascendant or descendant of your spouse.
- The spouse of any person listed above.
Friends, cousins, a nephew, an employer or a business contact are not relatives. A cousin is the classic trap: gifts between cousins are taxable once the yearly total from non-relatives passes ₹50,000.
Gifts that stay tax free whatever the amount
- On the occasion of your marriage, from anyone.
- Under a will or by inheritance.
- In contemplation of the death of the giver.
- From a local authority, or from a registered charitable trust or institution.
- From a fund, university, hospital or institution specified in the law.
- On certain business reorganisations named in the section.
Birthday, anniversary or festival gifts from friends get no special treatment. They count towards the ₹50,000 total.
Worked examples of gift tax
Money from friends. Rohit receives ₹20,000 from a college friend and ₹35,000 from his former manager in FY 2025-26. Total ₹55,000 from non-relatives, above ₹50,000. All ₹55,000 is taxed as income from other sources, not just ₹5,000.
Flat bought below value. Priya buys a flat from an acquaintance for ₹60,00,000. The stamp duty value is ₹68,00,000. The gap is ₹8,00,000. The allowed margin is the higher of ₹50,000 and 10% of ₹60,00,000, which is ₹6,00,000. The gap exceeds the margin, so ₹8,00,000 is taxed in Priya's hands. Had the gap been ₹5,50,000, nothing would be taxed.
Shares from an uncle. Anil's father's brother gifts him listed shares worth ₹4,00,000. An uncle on the father's side is a relative, so there is no tax on receipt.
Gifts, clubbing and reporting
A gift to your spouse is exempt, but the income that gift earns, such as FD interest, is added back to your own income under section 64. The same applies to a gift to your son's wife. Read more on the clubbing rules.
Taxable gifts go in the other sources schedule of your return. Large exempt gifts from relatives are best supported with a simple gift deed and bank trail, because large credits appear in the AIS and can prompt a query. See the guide to income tax notices if you receive one.
Gift rules under the 2025 Act
| Question | Gifts in FY 2025-26 | Gifts from tax year 2026-27 |
|---|---|---|
| Section | 56(2)(x) | Section 92 |
| Limit | ₹50,000 a year | ₹50,000 a year |
| Relative and marriage exemptions | Yes | Carried over |
Reports on the new law describe the rule as renumbered, not rewritten. For a gift received on or after 1 April 2026, quote the 2025 Act section.
Gift mistakes to avoid
| Mistake | Correct view |
|---|---|
| Taxing only the amount above ₹50,000 | Once the limit is crossed, the whole total is taxed |
| Treating a cousin or a friend as a relative | Neither is in the list |
| Ignoring a below-value property purchase | Compare price with stamp duty value |
| Thinking wedding gifts are taxed above ₹50,000 | Gifts on your own marriage are fully exempt |
This page explains the gift rules in general terms. Personal facts change the answer, so check the e-filing portal or speak to a chartered accountant about a specific gift.
Sources we checked
- Income-tax Act, 1961, section 56(2)(x)
- Income-tax Act, 1961, section 64
- Income-tax Act, 2025, section 92
Frequently asked questions
What does section 56(2)(x) of Income Tax Act tax?
It taxes money and certain property received without payment, or for less than its value, when the total from non-relatives in a year is above ₹50,000. The receiver pays tax at the slab rate.
Is a gift from my brother taxable?
No. A brother is a relative under the section, so a gift from him is exempt whatever the amount.
Is cash received at my wedding taxable?
No. Gifts received on the occasion of your own marriage are exempt, from anyone. Keep a record of large amounts.
How does 56(2)(x) of Income Tax Act apply to property bought below stamp duty value?
If the stamp duty value is higher than your price by more than ₹50,000 or 10% of the price, whichever is higher, the difference is taxed as your income.
Is a car received as a gift taxable?
No. A car is not in the list of movable property covered by the section, so it is not taxed under this rule.