The Income Tax Department said that persons receiving gifts either in cash or kind will have to pay tax, if the cost price of gift exceeds Rs 50,000. 

The Central Board of Direct Taxes has said that the norms would be effective from October 1. 

However, it would not be applicable on the gifts given by relatives or on the occasion of marriage. The CBDT also said that there would be no tax on gifts received by way of will, inheritance or in the event of death of the donor.

Now, CBDT will charge tax on gifts like real estate, cars and diamond jewellery. Earlier, income tax was applied only on cash gifts above Rs 50,000. During the budget session of 2009-10, all gifts in kind has been brought into the tax net. 

Talking to media, an official from CBDT said, “Any person who receives a gift of any such property on or after October 1, 2009, must pay income tax due on the value of the gift and disclose the taxable value of such property in the return of income for assessment year 2010-11 and subsequent years.”

Moreover, persons receiving gifts in excess of Rs 50,000 would have to show the value in the returns for 2010-11.