ITR filing 2026: Do you need to disclose both taxable and exempt gifts received from friends and family?

If you received cash, jewellery or other gifts from your friends or family during the financial year, they may be taxable in your hands depending on who gave the gift and its value. Such gifts should also be disclosed in your income tax return (ITR), even if they are exempt from tax.

With the ITR filing deadline now just a week away, understanding the tax rules on gifts can help taxpayers avoid mistakes while filing their returns and ensure they disclose only what is required. For taxpayers filing ITR-1 and ITR-2, the deadline is 31 July, 2026, with no extension communicated so far.

Are gifts taxable in India?

Any form of gifts received by a taxpayer are considered as income and must be disclosed under the head ‘Income from Other Sources’. They are subject to taxation at applicable slab rates.

However, the law provides several exceptions, under which certain gifts are exempt from taxation. The following are some of the key exemptions available under Section 56 of the income tax act for gifts that are not taxed:

• Gifts received from relatives.
• Gifts received from non-relative up to ₹50,000 a year.
• Gifts by the way of inheritance or will.
• Gifts received on the occasion of marriage (wedding gifts).

Disclosure of gifts received by the taxpayer

Any gift received by a taxpayer that are taxable under the income tax law should be appropriately disclosed in the ITR by the recipient wherever required. The responsibility for reporting such gifts rests with the person receiving them. You must report it under the head ‘Income from Other Sources’ in the ITR in the same financial year when you received the gifts.

Receiving high-value gifts without maintaining adequate records or making the necessary disclosures may, in some cases, invite scrutiny from the income tax department. If the gift are flagged as underreported or misreported income, taxpayers may also face a penalty ranging from 50% to 200% of the tax payable, depending on the nature of the default.

It is also important for taxpayers to rеmеmbеr that thе pеnalty undеr Sеction 270A of the Income-tax Act will be applicable in addition to thе tax duе on undеr-reported or misrеportеd income, according to Cleartax.

Do you need to report exempt gifts in ITR?

Yes, even if you received gifts from specified relatives or on a certain occasion like mentioned above, you still need to report these receipts while filing your tax return for FY 2025-26 and thereafter.

The reason is the introduction of a separate ‘Receipts not in the nature of income’ field in the ITR utilities for Assessment Year (AY) 2026-27 (FY 2025-26), which is meant for reporting receipts that are not subject to tax.

The new field is meant for reporting receipts that are not treated as income under the Income-tax Act. While gifts received from specified relatives and on certain occasions remain tax free, the updated ITR structure provides a separate section to disclose such receipts, wherever applicable.

However, taxpayers must remember that this doesn’t make your exempt gifts subject to taxes. The new field was not a part of the officially notified ITR forms or the PDF versions available on the Income-tax portal. It has been introduced only in the online filing utility and the JSON schema.