Do you know what you can earn through your wedding gifts?
Don’t tell me that nobody told you this. Wedding gifts are not just gifts that make you additional money if used properly.
In India, couples receive a plethora of gifts at their wedding. The gifts could be cash, gold, diamonds, a piece of land, a vehicle, appliances and almost anything. Almost every couple receives some kind of gift. more doesn’t matter. But only a few of them know about using their wedding gifts properly. In this blog, I will tell you how you can use your gifts and generate money from them too. Also, some unknown facts that nobody told you earlier.
So, without further ado let’s get started.
#Fact 1: Wedding Gifts Are Tax Exempted
Yes, all your wedding gifts are tax exempted, so don’t need to hide them from the government. Rather you can invest them to make additional money out of them.
As per Section 56 of the Income Tax Act, gifts presented to newlywed couples by their immediate family members (parents, siblings, or siblings’ spouses) during their wedding celebration are not subject to taxation in India. These gifts can include cash, houses, properties, gold, jewellery, stocks, and more, all of which enjoy exemption from taxation.
Know The Tax Rules on Wedding Gifts As Per Section 56
Let’s understand the Section 56 thoroughly in simple terms:
Wedding Gifts Received from Immediate Family Members
If a couple’s bank account gets credited with worth Rupees Five lakh by immediate family members, it won’t be taxed. But the credit should be made near the wedding date and can be in the form of a cheque or online transaction made by your family member.
Wedding Gifts Received from Friends
Under Section 56 of IT Act, if a couple receives gifts worth rupees 50,000 from friends it won’t be taxed. But exceeding the limit falls under taxation.
Immovable Property As a Wedding Gift
If a couple received immovable property such as a house or piece of land it would not be taxed. However, they have to pay a stamp duty of up to 50,000 rupees if it’s from an unrelated individual.
What to do with Cash Received As Gift on Wedding?
As soon as wedding functions are over make sure to deposit all cash gifts in the bank to avoid any tax implications.
Make sure to get a deed done for all expensive gift items like houses, cars, jewellery. Also keep a record of all gifts.
When are Wedding Gifts Taxed?
Even though wedding gifts are tax exempted in India, the income generated from it will be taxed. Let’s understand it:
If you receive a house as a wedding gift and later you start earning rent from the house. The rent will be taxed. Similarly if you sell that house, all capital gains will be taxed.
Consult A Financial Expert
Now that you know you can use your wedding gifts to make additional income, why keep it at home? To get better insight on the process and implications consult a financial advisor before your wedding so that you can start the process as soon as possible.
A curious girl filled with emotions & passion, Aparna holds a master’s degree in computer application, but words & stories fascinate her more than codes. She is a keen learner & a great admirer of art & culture. Sketching is her get away from daily hustle & bustle.