Gift From Non-Relative Tax Calculator India FY 2025-26
What Is This Tool?
Gifts from non-relatives—friends, colleagues, business associates, or any unrelated person—are fully taxable under Section 56(2)(x) of the Income-tax Act. Unlike gifts from family members, non-relative gifts have a ₹50,000 exemption with the ENTIRE amount above that being 100% taxable. This calculator helps you instantly calculate your exact tax liability on such gifts.
Why This Can Be Confusing
People often confuse gifts from relatives with gifts from non-relatives. The critical difference: Gifts from relatives enjoy a ₹50,000 exemption per donor (only amount above is taxable), while non-relative gifts have just a ₹50,000 exemption with the REST being fully taxable. Additionally, gifts are NOT salary income—they don't qualify for standard deduction, don't have TDS, and are NOT reported on Form 16. They're reported in Schedule OS (Other Sources) of your ITR.
How This Tool Works
This calculator takes your gift amount from a non-relative and applies the following logic: First, ₹50,000 is exempt per Section 56(2)(x). The remaining amount is 100% taxable as "Income from Other Sources". The calculator applies New Regime FY 2025-26 tax slabs, calculates surcharge and cess, and shows your final tax liability. There's NO standard deduction, NO TDS, and NO Form 16 for gift income—it's purely income tax at slab rates.
Step-by-Step: How to Use This Tool
- 1.Select your residency status (Resident Individual or NRI)
- 2.For NRIs: Gift must be received/deposited in India to be taxable
- 3.Input the total value of gift received from a non-relative during the financial year
- 4.₹50,000 exemption is automatically applied per Section 56(2)(x)
- 5.The remaining gift amount is added to taxable income (100% taxable)
- 6.Calculator applies New Regime FY 2025-26 tax slabs (0-5-10-15-20-25-30%)
- 7.Surcharge and cess are calculated based on your total income
- 8.See your final tax liability including all components
Real-Life Situations Where This Tool Helps
- ✓Employee receiving cash gift from colleague or office friend on birthday or special occasion
- ✓Person receiving large cash gifts from business associates or professional peers
- ✓Individual receiving gift from new acquaintance or casual friend (not relative)
- ✓Professional receiving gift from client or business contact
- ✓Someone receiving unexpected large gift from non-related person (e.g., ₹1 crore gift from a wealthy friend)
Common Mistakes
- ⚠Assuming all gifts have some exemption when non-relative gifts are 100% taxable beyond ₹50K (NOT ₹0 exemption like salary)
- ⚠Thinking gifts are salary income and looking for standard deduction (NO standard deduction applies to gifts)
- ⚠Not reporting the gift in ITR thinking gifts won't be taxed when they must be reported in Schedule OS
- ⚠Confusing TDS rules—there's NO TDS on gifts, NO Form 16, and Section 192 does NOT apply
- ⚠Not understanding that even gifts below ₹50K might need to be reported (depends on total income)
- ⚠Failing to maintain documentation of large gifts and their source for ITR verification/audit
- ⚠Forgetting that NRI gift tax applies ONLY if gift is received/deposited in India
Benefits
This calculator clearly shows the full tax impact of non-relative gifts in seconds. Instead of wondering if the gift is taxable or guessing your tax liability, you see exactly how much tax you owe. For gifts above ₹10 lakhs, maintaining a proper gift deed becomes important. This calculator helps you understand the significant tax burden upfront, enabling you to make informed financial decisions about accepting large gifts from non-relatives.
Frequently Asked Questions
Are all gifts from non-relatives fully taxable?+
Yes, gifts from non-relatives are taxable beyond ₹50,000. You get a ₹50,000 exemption per Section 56(2)(x). Any amount above that is 100% taxable as Income from Other Sources. So a ₹5 lakh gift results in ₹4,50,000 being taxable (₹5,00,000 - ₹50,000).
Is a ₹50,000 gift from a non-relative taxable?+
No, a gift of exactly ₹50,000 or less from a non-relative is NOT taxable. The exemption is ₹50,000, so gifts up to that amount are completely exempt. However, it's still good practice to maintain documentation of the gift.
What if I receive multiple gifts from different non-relatives in a year?+
The ₹50,000 exemption applies per financial year (April-March), NOT per donor. So if you receive ₹3 lakhs from one friend and ₹2 lakhs from another colleague, the total is ₹5 lakhs. Only ₹50,000 is exempt, making ₹4,50,000 taxable.
How is a non-relative gift different from a relative gift?+
Both have a ₹50,000 exemption, but the key difference is how the Income-tax Act defines them. Non-relatives (friends, colleagues, associates) have the full amount beyond ₹50K taxable. The definition of "relative" under tax law is specific: spouse, parents, siblings, children, and lineal ascendants/descendants. If in doubt, treat as non-relative.
Can I claim a standard deduction on gift income?+
No, absolutely NOT. Standard deduction (₹75,000 in New Regime) applies ONLY to salaried individuals. Gifts are income from "Other Sources," not salary. Therefore, NO standard deduction, NO TDS, and NO Form 16 applies to gifts.
Do I need to file an ITR for gift income?+
If your total income (including the gift) exceeds the basic exemption limit (₹3.5L for individuals below 60), you must file an ITR-2 with Schedule OS reporting the gift. Even if below the limit, it's advisable to file and maintain documentation for audit purposes.
Will TDS be deducted on my gift?+
No, NO TDS is deducted on gifts. Section 192 TDS provisions do NOT apply to gifts. Gifts are NOT salary, so Form 16 is also not issued. If your friend gives you ₹10 lakhs as a gift, no TDS is cut. You handle the tax liability when filing ITR.
What's a gift deed and do I need one?+
A gift deed is a legal document recording the gift transaction. It's recommended for gifts exceeding ₹10 lakhs. While not mandatory for tax purposes, it provides proof of the gift's genuineness and can protect both donor and recipient during ITR verification or audit. The deed should include: gift amount, donor details, recipient details, date, reason for gift, and both signatures.
How does gift tax work for NRIs?+
For NRIs, the rule is: Gift tax applies ONLY if the gift is received/deposited in India. If you're an NRI and receive a gift from abroad (even from a non-relative) that you deposit in an overseas account, it's NOT taxable in India. But if that same gift is received or brought/deposited in India, it becomes taxable as Indian-source income.
Can I reduce the taxable gift amount?+
No, there's no way to reduce the taxable amount beyond the ₹50,000 exemption. Unlike salary income which has deductions under Section 80C, 80D, etc., gift income from Other Sources has NO such deductions. The amount above ₹50K is fully taxable at slab rates. This is why gift income is often more heavily taxed than equivalent salary income.