Section 56(2)(x) gift tax, the complete India 2026 framework.

Section 56(2)(x) of the Income Tax Act, inserted by Finance Act 2017, applies to any individual, HUF, firm, LLP, company, or AOP receiving (from any person) in a FY:

• Any sum of money exceeding INR 50,000 aggregate in the FY → the whole amount is taxable as income from other sources at slab rate.
• Any immovable property without consideration + stamp duty value > INR 50,000 → stamp duty value is taxable.
• Any immovable property with inadequate consideration — difference between stamp duty value and consideration if difference > INR 50,000 and > 10% of consideration (safe harbour).
• Any specified movable property without consideration + FMV > INR 50,000 → FMV is taxable.
• Any specified movable property with inadequate consideration — difference between FMV and consideration if difference > INR 50,000.

Specified movable property: shares + securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, bullion. Other movable property (e.g., car, laptop, watch) is generally NOT covered by 56(2)(x) — outside gift tax scope.

Threshold mechanism: INR 50,000 is per FY aggregate per taxpayer across all gift receipts. The whole amount above INR 50,000 is taxable, not just the excess (slight nuance in how it's computed).

Gifts from relatives are fully exempt regardless of amount. The exhaustive list under Explanation to Section 56(2)(x):

For an individual:

• Spouse.
• Brother or sister (of the individual).
• Brother or sister of the spouse of the individual.
• Brother or sister of either of the parents of the individual.
• Any lineal ascendant or descendant of the individual (parents, grandparents, children, grandchildren).
• Any lineal ascendant or descendant of the spouse (parents-in-law, children's spouses as lineal descendant's spouses).
• Spouse of any of the above persons.

For HUF: any member of the HUF.

NOT relatives (gifts from these ARE taxable above INR 50,000):

• Friend.
• Uncle's or aunt's spouse (if the uncle/aunt is not blood-related).
• Cousin.
• Niece, nephew (unless lineal descendant via another route).
• Employer (except specific perquisite rules).

Section 56(2)(x) does NOT apply (fully exempt) in these additional scenarios:

• Gift on occasion of marriage of the individual — any gift (any amount) from anyone, exempt. Specific to the individual getting married, not for parents / siblings.
• Gift under a will or inheritance.
• Gift in contemplation of death of the payer.
• Gift from any local authority (as defined in Explanation to Section 10(20)).
• Gift from any registered trust / institution approved under Section 10(23C) or 12AA / 12AB.
• Gift from any trust or institution on behalf of government or local authority.
• Transactions not treated as transfer under Section 47.
• Specific transactions on amalgamation / demerger / resulting company reorganisations.

Immovable property gift from non-relative:

• Full stamp duty value is taxed in recipient's hands (at slab rate) if value > INR 50,000.
• Not the actual cash paid — the stamp duty value.
• Example: father's friend 'sells' recipient a property for INR 10 lakh when stamp duty value is INR 50 lakh. INR 40 lakh is taxed in recipient's hands under 56(2)(x) (because consideration inadequate by >10% + > INR 50,000).

Immovable property gift from relative: exempt under 56(2)(x). But for GST / stamp duty, actual stamp duty on gift deed still applies to the recipient.

Shares gift from non-relative:

• FMV of shares at receipt is taxed in recipient's hands at slab rate.
• FMV determined by Rule 11UA (NAV method for unlisted; closing price for listed).
• Example: friend gifts you shares of your Indian startup worth INR 5 lakh. Recipient pays slab tax on INR 5 lakh.

Shares gift from relative: exempt. Cost of acquisition for subsequent capital gains = original cost in donor's hands (Section 49(1)).

Last updated: 2026-10-12.