Archive / Investment Adviser (Level 2) / Income from Other Sources
nism-series-xb-gift-taxation-threshold-non-relative[ INVESTMENT ADVISER (LEVEL 2) ]
Under Section 92(2)(m) of the Income-tax Act, 2025 (the erstwhile Section 56(2)(x) of the Income-tax Act, 1961), gifts received in cash or kind by an individual from a non-relative become taxable as 'Income from Other Sources' once their aggregate value in a financial year exceeds what threshold?
[ A ]Rs. 50,000[ CORRECT ]
[ B ]Rs. 1,00,000
[ C ]Rs. 2,50,000
[ D ]There is no threshold — all gifts received are fully taxable regardless of amount
Takeaway
Option A is correct: Rs. 50,000.
Derivation
Under Section 92(2)(m) of the Income-tax Act, 2025 (the provision was numbered Section 56(2)(x) under the erstwhile Income-tax Act, 1961), if an individual receives money or property without consideration (a gift) from a person who does not fall within the Act's defined list of 'relatives', and the aggregate value of all such gifts received in a financial year exceeds Rs. 50,000, the entire aggregate amount becomes taxable as 'Income from Other Sources' — not merely the excess over Rs. 50,000. Gifts received from defined relatives, or on occasions such as marriage, remain exempt regardless of amount.
Why the others fail
B — Rs. 1,00,000
Rs. 1,00,000 does not correspond to the gift-taxation threshold under Section 92(2)(m); it is sometimes confused with unrelated capital-gains exemption figures.
C — Rs. 2,50,000
Rs. 2,50,000 is the basic income-tax exemption slab under the old regime, not the Section 92(2)(m) gift-taxation threshold.
D — There is no threshold — all gifts received are fully taxable regardless of amount
Section 92(2)(m) does set a threshold, but crossing it is a cliff, not a slab — once aggregate gifts from non-relatives exceed Rs. 50,000 in a year, the entire aggregate becomes taxable, not merely the amount above Rs. 50,000. And gifts from relatives as defined in the Act remain exempt regardless of amount.