ITR Filing: In India, weddings are treated as a festival for family and friends, and giving big gifts is part of a culture. However, for tax authorities, these are not just gifts but sources of income, and must be properly declared in your Income Tax Return (ITR) filing.
Wedding gifts are hugely prevalent in India, and no wedding in the country are complete without them. The calculation of tax on wedding gifts in your ITR depends on multiple factors, like its value, who has gifted and the parties involved.
To understand how much tax you need to pay on your wedding gift, you first need to understand the definition of gifts with reference to income tax rules in India.
A voluntary transfer of movable or immovable property by an individual or an organisation to another individual is known as a gift. A gift can be in any form including cash, jewellery, house property, stock or gold.
Are wedding gifts taxable?
All wedding gifts received by the taxpayer, be it cash or gold, is exempt from income tax under Section 56 of the Income Tax Act 1961. In cases other than marriage, gifts are tax-exempt if they are gifted by immediate family like parents, siblings and siblings’ spouses.
For example, if you receive ₹10 lakh from your father as a wedding gift, you will not be taxed while filing your ITR for AY2024-25.
Here is a list of wedding lifts that are tax exempt under Section 56 of the Income Tax Act 1961:
How to file ITR for wedding gift?
While wedding gifts are exempt from tax, they must be declared in your ITR filing regardless of the value. Wedding gifts are treated as Income and couples are required to disclose as Income from Other Sources in ITR-2 or ITR-3, whichever is applicable.
Newly-wed couples are advised to deposit the cash they receive during their marriage near to the wedding date to steer clear of trouble. It is also advisable to keep a record of all the wedding presents they have received to make the tax calculations easier.
