Raksha Bandhan 2023: Unpacking the Tax Implications of Gifting Cash to Your Sister – Insights into Income Tax Regulations
Gifts exchanged between siblings are exempt from taxation for both the giver and the recipient.
Raksha Bandhan 2023: Commemorating the special bond between siblings, Raksha Bandhan is a cherished festival. While the tradition of exchanging gifts during Rakhi endures, contemporary trends continue to evolve. Amidst these changes, one timeless gesture persists—the tradition of brothers gifting money to their sisters. The question arises: What is the appropriate monetary gift for your sister on Raksha Bandhan 2023? Additionally, is this gift subject to taxation as per income tax regulations? Let’s explore the guidelines set forth by income tax rules.
There are no restrictions on the value of gifts presented to relatives who are connected in a direct ancestral or descendant line. As your sister belongs to the same bloodline as you, any gift exchanged with her holds a special status. According to Archit Gupta, the Founder and CEO of Clear, “Gifts exchanged between siblings are exempt from taxation for both the giver and the recipient.”
There exists no defined ceiling regarding the value of a gift that one individual can bestow upon another, be it within the realm of income tax regulations or any other legal framework. Similarly, the extent of gifting in monetary form remains unbounded. Tax and investment authority Balwant Jain elucidates that a threshold of ₹2 lakh is established, surpassing which acceptance of cash from any party, encompassing transactions such as gifting, is restricted on a single occasion.
Should the amount exceed ₹2 lakh, Jain advises that conducting the transaction through established banking channels becomes imperative to ensure compliance with legal norms.
Balwant Jain supplements that gifts fall under the purview of taxation for the recipient, in accordance with Section 56(2)(x), unless the giver falls within the category of specified relatives, in which case the provision’s scope does not apply.
Raksha Bandhan 2023: Date, time, muhurat
Raksha Bandhan is scheduled for Wednesday, August 30th this year.
For tying the Rakhi on August 30th, the most auspicious period is after 9:01 pm.
On August 31st, the ideal time to perform the Rakhi ceremony is before 7:05 am.
