Getting Married Soon? Know All About The Wedding Gift Tax Rules Before Your Big Day

A wedding day in India is a celebration of joyous times and new beginnings. But do you know this is the only time you can receive expensive gifts that are tax-free? Yes, unlike the typical gift-tax rules, the bride and the groom can receive gifts worth above ₹50,000 from non-relatives that are fully exempt from tax. If you are getting married soon, you should definitely know these rules.

Gifts Received During  The Wedding Are Tax-Free

In India, the value of gifts received by anyone is taxable. It basically means that if someone receives gifts above ₹50,000 from non-relatives, they will be fully taxable. These gifts must be reported as ‘Income from other sources’. But not during weddings. As per a report by The Economic Times, weddings in India are that rare time when gifts received even from non-relatives are non-taxable.

In non-wedding scenarios, only gifts given by close relatives like parents, siblings, in-laws and other lineal ascendants or descendants are exempt from tax. But during weddings, the term ‘relative’ is considered broader. A gift received from a step-sibling, a friend, or even an acquaintance will be exempt from tax.

Also Read: Piyush Mishra Shares How He Met His Wife, And Had A Runaway Wedding In Delhi 

What Does The Law Say?

According to a report by The Economic Times, under Section 56 (2)(x) of the Income Tax Act, wedding gifts are non-taxable regardless of who gives them. But this makes us question one more thing: are only gifts received on the wedding day exempt? Don’t worry, because according to the law, gifts received ‘on the occasion of marriage’ are tax-free. Reportedly, gifts received within 10-15 days after the wedding will remain tax-free. These gifts can include not just cash, but also cheques, jewellery and other assets.

Though the wedding gift tax rule might be advantageous, it also comes with an important rule. To fully avail the benefit, you will be required to show documentation. This includes:

• Wedding invitation cards or their soft copies
• Guest lists
• Photographs or videos, 
• Details of those giving the gifts
• Bank entries
• Any kind of email or messages related to the gift. 
• You must disclose details in your ITR form’s Schedule AL, if applicable.

This points to the fact that proper documentation is important in case the tax department seeks verification.

One more important thing you should note is that wedding gifts are tax-free only at the time you receive them. According to a report by Times Now, any subsequent sale of the gifts might trigger capital gains tax. The cost to the previous owner will be treated as the cost of acquisition. This is why it gets more important to keep invoices as proof. For high-value gifts, one can consider opting for valuation from registered valuers.

Also Read: UP Wedding Turns Into Battlefield After Groom’s Side Claims They Got Fewer Chicken Fry Pieces; 15 Injured

So, if you are getting married soon, make sure you keep these wedding gift tax rules in mind.

Cover Image Courtesy: Canva Pro/ CAMERA TREASURE (Representative Image)