The earlier abolished Gift Tax has once again come back with a fine print. W.e.f. 1-4-2005 any sum of money received upto 25,000 from unrelated persons is not taxable in the hands of receiver- individual or HUF (no restrictions on number of transactions) Any money received in excess of Rs. 250000 in aggregate in the form of cheque, draft or any other mode of credit would be charged to tax . The money will not be taxable if it is received as consideration for goods or services and also from relatives. The relative may be the * Brother or sister * Spouse’s brother or sister * Brother or sister of either of the parents * any lineal ascendant or descendent of the self or spouse * Spouse of all the above mentioned person and * Spouse of the self. Also gift from the relatives should come from natural love and affection.

Point to cheer : W.e.f. 1.9.2004 any cash gift received upto Rs.1 lakh each for bride & bridegroom (effectively 2 lakhs) on wedding day from anyone (relatives or not) would not fall under gift tax. Money received under Will, by way of inheritance, and benefits from employer for your service to the employee or to the dependent in his absence also will not attract Gift Tax.