provisions of the Act, but a gift received by an uncle from his nephew is not covered under the exceptions. In the case of a HUF, a relative means any member of the HUF. A gift received by a HUF from its members is fully exempt from tax.
Gifts received by a partnership firm or a privately held company in the form of shares of a privately held company have also been brought under the ambit of taxation. It is taxable if the aggregate fair market value of shares exceeds R50,000. This could be relevant in case of your partnership firms or private companies. An individual receiving taxable gifts is required to offer these gifts to tax and disclose them in the income tax return under the head ‘income from other sources’.
The writer is executive director, Tax & Regulatory Services, PwC India