Income tax on gifts: What qualifies as movable property, how gifts are taxed, when exemptions are available? Explained

Receiving gifts of movable property from family or friends does not always mean you are free from tax. While some gifts are exempt, others, such as jewellery, shares, or gold, can be taxable depending on their value and who gives them.

Even buying certain movable assets at a price lower than their market value can have tax implications. Here's what you need to know.

The law does not cover every movable item for gift taxation. It specifies certain assets, including:

• Shares and securities
• Jewellery
• Archaeological collections
• Drawings and paintings
• Sculptures
• Any work of art
• Bullion
• Virtual digital assets (VDAs), including cryptocurrencies.

These specified movable properties must qualify as capital assets of the taxpayer to fall under the definition.

Gifts of movable items that are not on this specified list are not taxable. For example, receiving a television, furniture, or other household items as a gift does not attract tax because these are not classified as prescribed movable property under the Income-tax Act.

If an individual or Hindu Undivided Family (HUF) receives any of the specified movable assets without paying for them, the gift becomes taxable if their aggregate fair market value during the tax year exceeds ₹50,000.

Importantly, once this threshold is crossed, the entire fair market value, not merely the amount exceeding ₹50,000, is treated as the recipient's income.

For instance, if someone receives jewellery worth ₹80,000 from friends during a year, the entire ₹80,000 is taxable. The fair market value of the movable property will be considered as the recipient's taxable income.

The tax liability falls on the recipient of the gift, not the person giving it. Under Section 92 of the Income-tax Act, 2025, the taxable value of the gift is treated as ‘Income from Other Sources’ and added to the recipient's total taxable income.

It is taxed at the applicable income-tax slab rate, depending on the recipient's total income and the tax regime chosen.

Yes. If an individual or HUF purchases movable property for less than its fair market value, the difference can be taxable if the aggregate difference exceeds ₹50,000 during the tax year.

In this case, the difference between the fair market value and the amount paid is treated as income.

The law provides exemptions for specified gifts, even if their value exceeds ₹50,000 or they are received at a discounted price.

These include property received:

• From relatives, including the individual's spouse, brother or sister, spouse's brother or sister, siblings of either parent, lineal ascendants and descendants (maternal and paternal) of the individual or spouse, and spouses of these relatives.
• On the occasion of marriage.
• Under a will or through inheritance.
• In contemplation of the donor's death.
• From or by a registered non-profit organisation, subject to the specified exception under section 355(h).
• Through transactions not regarded as transfers under the specified clauses of section 70(1).
• By a trust created solely for the benefit of the donor individual's relatives, where the property is received from that individual.

Thus, gifts of specified movable property from friends generally remain taxable if the applicable value threshold is crossed, while gifts from qualifying relatives are exempt.

Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance. <br><br> She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram. <br><br> Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.

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HomeMoneyPersonal FinanceIncome tax on gifts: What qualifies as movable property, how gifts are taxed, when exemptions are available? Explained

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