India’s Government is expanding its gift taxation laws to include a larger lists of items, not just cash.
According to India’s Central Board of Direct Taxes (CBDT), from the 1st of October, new tax rules will take effect mandating that any and all gifts received, valued at over Rs. 50,000, will be required to be declared and taxed by the receiver. Since the 1st of April 2006, cash gifts of Rs. 50,000 were subject to a tax liability, but the regulation has now been expanded to include land and buildings, shares and securities, jewellery, drawings, paintings, archaeological collections and other works of art . The value of the gift must be disclosed in the 2010-11 tax assessment year and the following years. Tax liability will be calculated on the basis of the receiver’s tax bracket once the gift value is taken into account.
The newly expanded gift tax does not apply to gifts between close relatives, which have been defined as siblings, spouses, siblings of spouses, parents and siblings of parents. Gifts received upon marriage are also not applicable for the tax, as are assets passed across in the event of inheritance, wills, or the passing of the donor. Gifts from trusts and local authorities are also exempt.
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