India’s Income-tax Act, 2025 has replaced the gift-tax deemed-income rule under Section 56(2)(x) of the 1961 Act with Section 92(2)(m), changing how gifts are taxed for NRIs and families with cross-border financial ties.

The legislation treats gifts under the head “Income from other sources.” It does not establish a separate Gift Tax Act. Instead, certain gifts become taxable as income in the hands of the recipient, with taxability depending on the nature of the gift, its value, the relationship between donor and recipient, and the specific exemption available.

Key Provisions of Section 92(2)(m)

Section 92(2)(m) applies only when a gift falls within specified taxable categories and does not qualify for an exemption. The law covers three broad types of receipts: money received without consideration; immovable property such as land or building received without consideration or for inadequate consideration; and specified movable property including shares, securities, jewellery, artwork, bullion, and virtual digital assets.

Gifts from a specified “relative” fall outside the taxable rule. Gifts received on the occasion of marriage, through a will, by inheritance, or in contemplation of death are also excluded.

Understanding Taxability Thresholds

Taxability is not decided by amount alone. A ₹10 lakh gift from a parent may be tax-free because a parent is a covered relative. A ₹75,000 gift from a friend may become taxable if no exemption applies.

The ₹50,000 threshold remains one of the most misunderstood elements of Indian gift taxation. When money received without consideration from non-exempt persons during a tax year exceeds ₹50,000, the entire sum becomes taxable, not just the excess amount.