Gift From Relative Tax Calculator
What Is This Tool?
Gifts from relatives like parents, spouse, siblings, and children are special under Indian tax law—they come with a **complete exemption** under Section 56(2)(x). Any amount gifted by specified relatives is fully exempt from income tax. Our gift from relative tax calculator helps you understand your gift exemption status and confirms that your gift from relatives is completely tax-free.
Why This Can Be Confusing
People are often confused whether gifts are taxable. The answer depends on whether the gift is from a relative and how much it is. The definition of "relative" under tax law is specific, and gifts from relatives versus non-relatives are treated completely differently. Many people mistakenly think gifts are always taxable or that there's a limit; the reality is that gifts from specified relatives are **fully exempt** regardless of amount, while gifts from non-relatives are fully taxable.
How This Tool Works
This calculator takes your gift amount from a specified relative and immediately shows you that **the entire amount is fully exempt** under Section 56(2)(x) of the Income-tax Act, 1961. There's no calculation needed—any gift from a parent, spouse, sibling, child, grandparent, or grandchild is completely tax-free. The only requirement: if your gift exceeds ₹2 lakhs, you must disclose it in Schedule EI of your ITR for transparency.
Step-by-Step: How to Use This Tool
- 1.Select your residency status (Resident or NRI). While all gifts from relatives are exempt regardless of residency, this determines your ITR filing form.
- 2.Enter the total value of gifts received from specified relatives during the financial year. Include gifts from parents, spouse, siblings, children, grandparents, and grandchildren.
- 3.Click Calculate. The calculator confirms that your entire gift amount is fully exempt under Section 56(2)(x).
- 4.Review the results showing ₹0 tax liability and the compliance requirements.
- 5.Note: If your gift exceeds ₹2 lakhs, disclose it in Schedule EI of your ITR-1 or ITR-2, even though no tax is due.
Real-Life Situations Where This Tool Helps
- ✓Parents gifting ₹50 lakhs to their adult child for purchasing a home—completely exempt, no tax on the child.
- ✓Spouse receiving ₹10 lakhs as a gift during anniversary—fully exempt under Section 56(2)(x).
- ✓Grandparents gifting ₹5 lakhs to grandchild for education—complete exemption, not taxable.
- ✓Siblings gifting ₹20 lakhs to each other for starting a business—fully exempt, no income tax impact.
- ✓Parent gifting ₹100 lakhs in inheritance to adult child—completely tax-free under gift exemption rules.
Common Mistakes
- ⚠Confusing gift exemption with ₹50,000 limit: Under Section 56(2)(vi), gifts from relatives have an exemption of ₹50,000 per donor in gifts not covered by 56(2)(x). However, gifts from spouses, lineal ascendants (parents, grandparents), and lineal descendants (children, grandchildren) under Section 56(2)(x) are FULLY exempt regardless of amount.
- ⚠Not realizing the difference between 56(2)(x) and 56(2)(vi): Section 56(2)(x) covers gifts from certain relatives and provides full exemption. Section 56(2)(vi) covers gifts from other relatives and provides ₹50,000 exemption. This page covers 56(2)(x)—full exemption.
- ⚠Assuming gifts from all relatives are fully exempt: Only gifts from spouses, lineal ascendants (parents, grandparents), and lineal descendants (children, grandchildren) are fully exempt. Gifts from cousins, uncles, aunts, or more distant relatives fall under different rules and may have partial exemption or full taxation.
- ⚠Forgetting to disclose large gifts in ITR: Even though gifts from relatives are fully exempt from tax, gifts exceeding ₹2 lakhs must be disclosed in Schedule EI of your ITR. Many people skip this disclosure, which can trigger tax department notices.
- ⚠Mixing gift from relative with gift from non-relative: Gifts from non-relatives (friends, colleagues, acquaintances) are fully taxable from the first rupee. This is treated completely differently from gifts from relatives.
Benefits
This calculator provides instant clarity: **your gift from relatives is fully exempt**. No calculations, no deductions, no partial exemptions—the entire amount is tax-free. This peace of mind is invaluable, especially when large sums are involved. You know there's no tax liability, and you know the compliance requirement (Schedule EI disclosure if >₹2L). This clarity helps families confidently make financial transfers without tax surprises.
Legal Basis & Authority
Section 56(2)(x) – Gifts from Specified Relatives
Gifts received from spouse, parents, grandparents, siblings, children, grandchildren, and other specified lineal relatives are fully exempt from income tax under Section 56(2)(x) of the Income-tax Act, 1961. Any amount is completely tax-free.
Schedule EI – Disclosure Requirement
While gifts from relatives are fully exempt, gifts exceeding ₹2 lakhs must be disclosed in Schedule EI of your ITR-1 or ITR-2. This is a compliance requirement for transparency, even though no tax is due.
Section 56(2)(vi) – Gifts from Other Relatives
For gifts from relatives not covered by 56(2)(x) (like cousins, uncles, aunts), Section 56(2)(vi) provides an exemption of ₹50,000 per donor per financial year. This section does not apply to gifts under 56(2)(x).
FY 2025–26 Compliance
This calculator applies all provisions under the Income-tax Act, 1961 as applicable for FY 2025–26 (AY 2026–27), including CBDT notifications and Finance Act, 2025 amendments.
Disclaimer
Gifts from specified relatives are fully exempt under Section 56(2)(x). This calculator confirms that exemption. However, consult a qualified Chartered Accountant (CA) if your situation involves complex gift structures, conditional gifts, or gifts combined with other income types.
Frequently Asked Questions
Are gifts from parents to children fully taxable?+
No, absolutely not. Gifts from parents to children are fully exempt under Section 56(2)(x) of the Income-tax Act, 1961. Any amount gifted by a parent to their child—whether ₹10,000 or ₹10 crores—is completely tax-free. No tax is due, no deduction is available, and the entire gift is exempt.
What is the limit on gift exemption from relatives?+
For gifts under Section 56(2)(x) from spouses and lineal relatives (parents, grandparents, children, grandchildren), there is no limit. Any amount is fully exempt. This is the most generous gift exemption in Indian tax law. The limit applies to different categories of relatives under Section 56(2)(vi), but that's a separate rule.
Who qualifies as a 'relative' for full gift exemption?+
Full exemption under Section 56(2)(x) applies to gifts from: (1) Spouse, (2) Parents, (3) Grandparents, (4) Great-grandparents, (5) Children, (6) Grandchildren, (7) Great-grandchildren, and other lineal ascendants or descendants. Cousins, uncles, aunts, and friends do not qualify for this full exemption.
Do I need to report a ₹50 lakh gift from my mother in ITR?+
Yes, you should report it. While the gift is fully exempt and no tax is due, gifts exceeding ₹2 lakhs must be disclosed in Schedule EI of your ITR-1 or ITR-2. This is a compliance and transparency requirement. Failure to disclose large gifts can trigger tax department inquiries. You must file ITR and include the gift disclosure even though it's exempt.
Is gift from spouse taxable?+
No, gifts from spouse are completely tax-exempt under Section 56(2)(x). A husband gifting money to his wife or vice versa is fully exempt from income tax. Any amount transferred between spouses as a gift faces no tax liability.
Are gifts from grandparents to grandchildren taxable?+
No, gifts from grandparents (or great-grandparents) to grandchildren (or great-grandchildren) are fully exempt under Section 56(2)(x). These are lineal relatives, and any gift amount is completely tax-free.
What if I gift money to my relative? Am I taxed?+
No, if you gift money to your relative, neither you (the giver) nor they (the receiver) face any income tax on the gift. Gifts are never taxable to the giver. The receiver may face tax only if the gift is from a non-relative and exceeds certain amounts. Gifts between relatives are tax-free on both sides.
What about inheritance? Is that treated as a gift?+
Inheritance is not treated as a gift under income tax law. Amounts received as inheritance are completely exempt from income tax and don't need to be included in ITR. However, if you inherit property and later sell it, capital gains tax applies. But the inheritance itself is tax-free.
Do I need Form 16A for gift from relatives?+
No, Form 16A is not applicable for gifts from relatives. Form 16A is used for TDS on other income types. Gifts from relatives don't have TDS, and no Form 16A is issued. The gift is simply exempt, and you report it in your ITR if it exceeds ₹2 lakhs (in Schedule EI).
Can I gift to my friend without tax implications?+
Gifts to friends are not affected by income tax in India. Unlike receiving gifts (where source matters), giving gifts has no tax implication for the giver regardless of whether the recipient is a relative or friend. However, receiving gifts from non-relatives is fully taxable to the receiver.