📑According to Section 56 of the Income Tax Act, 1961, ANY gifts including, cash, cars, real estate, jewelry, and stocks — received by the bride or groom during their wedding ceremonies are exempt from tax! This exemption is also applicable to gifts received by the couple from their relatives and friends.
👰This exemption is ONLY applicable to gifts received DURING the wedding ceremonies.
📹Maintaining records of the gifts is important. We have the tradition of keeping a record of all the gifts and cash received during the wedding, including their value and the details of the person who gave the gift, and this actually a useful one! The practice of clicking photos with the couple while giving gifts, is also very useful, because maintaining such records helps in case there’s scrutiny later on.
📈Any income generated from the gifts received on the occasion of marriage is subject to tax. For example, you received a house property as a wedding gift, and let out the property on rent. The income earned with this rent will be taxable. Also, if you sell the property in the future, the capital gains that will be generated will be taxable. Same thing goes for cars, stocks or any other asset.
🧐The giver of the gifts can come under scrutiny too! In case you have recived the gift and have declared that someone else gave it to you, but they haven’t paid all their due taxes on it, they may come under suspicion, so it’s better to keep things above board!
Don’t take taxes and weddings likely, the larger the wedding, the quicker it comes on the radar of the IT department. Share this with someone getting married this season and help them save some tax. We’ll see you in the next one...