• Notification Date: 08-03-2022
  • Notification No: N/A

Income Tax Rules on Gift Cash Presented to Wife

According to the Income-tax Rules, cash money presented to someone as a gift within a limit of Rs.50,000 attracts no tax under normal circumstances.

For presenting a cash gift by a husband to the wife, there is no limit to the amount gifted. There will be no Income-tax rate imposed on the gift amount. According to the statement given by Dr Suresh Surana, Founder of RSM India to FE Online, there is no threshold applicable to the cash gift presented to a special relative under Section 56(2) (x) of the Income-tax Act. Hence, the cash gifted by a husband to his wife is exempted from tax charges.

As per Section 269ST of the I-T law, an individual is not eligible to receive more than Rs.2 lakhs of cash from another individual in a single day. Hence, there cannot be a transaction of more than Rs.2 lakhs.

Dr Surana added that the gifted cash is free from taxation in the hands of the wife. But the income accrued by the husband for the gift amount will be subjected to the clubbing provisions of taxation under Section 64(1) (iv) of the Income-tax Act.

The clubbing amount is required to be factored into the tax planning by the husband before making a cash gift to the wife.