Income Tax News: How Much Tax Will You Have to Pay If Your Father Gifts You Rs 10 Lakh? Check

If you receive a gift of Rs 10 lakh from your father, will you have to pay tax on it? The answer is no. According to Section 56(2)(x) of the Income Tax Act, 1961, any sum received as a gift from a relative, including parents, is exempt from income tax. Therefore, you will not bear any tax liability on the Rs 10 lakh gift from your father.

Tax Implications of Receiving Gifts from Parents

As per Shubham Agrawal, Senior Taxation Adviser at TaxFile.in, gifts received from parents do not attract any tax liability. However, it is advisable to execute a gift deed mentioning the amount, relationship, and the fact that the gift is irrevocable. Additionally, accepting the amount via bank transfer ensures a clear financial trail.

Since income tax returns (ITR) are annexure-less, there is no need to submit any supporting documents. However, keeping a record of the gift deed is recommended for future reference.

What If You Donate the Gifted Money?

If the gifted money is further donated to a community hospital or any charitable institution, the tax deduction eligibility will depend on whether the institution is registered under Section 80G of the Income Tax Act. Amit Maheshwari, Tax Partner at AKM Global, explains that donations to such institutions may qualify for a 50% or 100% deduction, depending on their registration category.

To claim this deduction:

The donation must be made through non-cash methods (cheque, bank transfer, or digital payments) for amounts exceeding Rs 2,000.

 Deductions under Section 80G are available only under the old tax regime.

Thus, while the Rs 10 lakh gift from your father remains tax-free, any potential tax benefits on donations will depend on compliance with Section 80G requirements.