📜 Governing Section: Section 56(2)(x) of the Income Tax Act, 1961
The provisions related to the taxation of gifts are primarily covered under Section 56(2)(x) of the Income Tax Act. This section deals with income from “other sources” and includes rules for the taxation of gifts.

🎁 What is Considered a Gift?
A “gift” may be in the form of:
Cash
Immovable property (e.g., land, buildings)
Movable property (e.g., shares, jewelry, artwork)

💰 Taxability of Gifts – What’s Taxed?
Gifts are taxable when:
👉 Cash Gifts: If the aggregate value of cash received without consideration exceeds ₹50,000 in a financial year, the entire amount is taxable.
👉 Movable Property: If movable properties (like shares, gold, etc.) are received without consideration and the fair market value exceeds ₹50,000, the entire FMV is taxable.
👉 Immovable Property: Without consideration: If the stamp duty value exceeds ₹50,000, the entire value is taxable.
For inadequate consideration: If the difference between stamp duty value and consideration is more than ₹50,000 and 10% of the consideration (whichever is higher), the difference is taxable.

✅ Exemptions – When Gifts Are Not Taxable
Gifts are exempt from tax under the following circumstances:
1. Gifts from relatives:
Spouse
Brother or sister of self or spouse
Brother or sister of parents
Any lineal ascendant or descendant (and those of spouse)
Spouse of any of the above
2. On occasion of marriage of the individual
3. Under a will or by inheritance
4. In contemplation of death of the donor
5. From local authority, registered trust, or charitable institutions

👥 Tax Liability & Reporting
The recipient (donee) is liable to pay tax.
➡️ Gift is taxed under the head “Income from Other Sources”.
➡️ It must be reported in the Income Tax Return (ITR).
➡️ If the gift is exempt (e.g., from relatives), it’s advisable to report under “Exempt Income” for disclosure.

👶 Gifts to Minors – Clubbing Provisions
If a child (minor) receives a gift, the income is clubbed with the parent’s income whose total income is higher.
Exemption up to ₹1,500 per child is allowed under Section 10(32).

🌐 Gifts from Abroad (NRIs & OCIs)
➡️ Gifts from relatives abroad (NRI/OCI) are exempt if they qualify as relatives under Indian tax laws.
➡️ Gifts from non-relatives abroad over ₹50,000 are taxable in India.
➡️ Foreign Exchange Management Act (FEMA) regulations may also apply.

🧾 Documentation & Compliance
Though not mandatory, a gift deed (on stamp paper) is recommended for record and to prove the intention.
Keep PAN of donor, bank transfer evidence, or property valuation report if applicable.
For large-value gifts, especially from abroad, reporting under FEMA and RBI guidelines may apply.