Bhai Dooj gift tax rules: Got money or gold from your brother? Check when festival presents become taxable
Following Dhanteras and Diwali, Indians are set to celebrate Bhai Dooj on Wednesday, November 11 this year, a traditional Hindu festival that honours the special bond between brothers and sisters.
This occasion is often celebrated by exchanging presents, with cash, gold, jewellery and other valuable items among the popular choices.
However, such transfers may have tax implications depending on the relationship between the giver and the recipient and the value of the item being gifted.
Any gifts received by a sister from her blood brother or sibling is exempt from income tax, irrespective of its value. Under Section 56(2)(x) of the Income-tax Act, 1961, gifts such as cash, jewellery and other assets received from specified relatives are tax-free, and brother is included in the definition of a relative.
Even if the brother is a minor and the gift is funded by parents, no tax is applicable, as both the mother and father are also classified as relatives. This is true even if the value of the gift exceeds ₹50,000.
However, tax exemption does not necessarily mean that the gift does not have to be disclosed in your income tax return (ITR). Large financial gifts should be reported under the ‘Receipts not in the nature of income’ field in the ITR utilities, which is meant for disclosing such tax-exempt receipts.
For example, if your brother gifts you ₹1 lakh in cash or gold worth ₹3 lakh tomorrow, you must report the amount in your tax return for AY 2027-28, which is during the next tax filing season.
As per income tax rules, gifts received from maternal or paternal cousins are not exempt from tax if their aggregate value exceeds ₹50,000 in a financial year. The same rule applies to gifts received from people who are not related to you, such as friends or neighbours, even if they are given during Bhai Dooj.
This means that any gift with monetary worth up to ₹50,000 remains tax-free. But the moment the value exceeds this limit, the entire gift becomes taxable under “income from other sources”.
Tax exemption on cash or other assets only applies to “specified” relatives which includes parents, siblings, spouse, grandparents, direct lineal ascendants or descendants and siblings of parents like an uncle or aunt.
Yes, even if gifts received on Bhai Dooj are tax-free, maintaining documents to establish where the money came from and why it was transferred to you is important to avoid tax queries, especially if it involves large amounts.
Parents or brothers can issue a gift deed or a signed gift letter specifying the amount gifted, the date of transfer and confirming that the money is being given voluntarily, with no obligation on the recipient to repay it.
To respond to any queries from the income tax department about a large credit to your account, it is advisable to keep supporting documents handy. These may include bank statements, proof of your relationship with the giver and evidence of the source of funds transferred by your parents or brother.
Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
HomeMoneyPersonal FinanceBhai Dooj gift tax rules: Got money or gold from your brother? Check when festival presents become taxable
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.