Tax on Diwali Gifts 2026: The ₹50,000 Rule, the Relatives List and the ₹15,000 Voucher Limit
Ankit, a 31-year-old software tester in Gurugram, had a generous Diwali week. His company gave him ₹12,000 in gift vouchers. Five college friends sent a total of ₹40,000 over UPI for his new flat. His mama, his mother’s brother, gave him a 10-gram gold coin worth about ₹1.4 lakh. Then, a few days later, another friend handed him ₹15,000 in cash. Of all these, the cash looks the smallest, yet it is the gift that changes his tax on Diwali gifts the most.
The rules come from two places: the Income-tax Act, 2025, for gifts from people, and the Income-tax Rules, 2026, for gifts from an employer. Both are explained below with Ankit’s numbers.
The ₹50,000 rule for gifts from friends
The Income Tax Department’s page on gifts received by an individual or HUF, updated for the Income-tax Act, 2025, as amended by the Finance Act, 2026, says money received without consideration is taxed when “the aggregate value of such sum of money received during the year exceeds Rs. 50,000”. Cash, UPI, cheque and bank transfer all count as money.
The important word is aggregate. The department spells it out: if the total crosses ₹50,000, “the total value of all such gifts will be charged to tax (i.e., the total amount of gifts, not the amount in excess of Rs. 50,000)”. Its own illustration has a person receiving ₹25,000 and ₹28,000 from friends, and the entire ₹53,000 is taxed.
| Ankit’s money gifts from friends | Running total | Taxable amount |
|---|---|---|
| ₹40,000 over UPI for the flat | ₹40,000 | Nil, total is below ₹50,000 |
| ₹15,000 cash from another friend | ₹55,000 | ₹55,000, the full total |
So the ₹15,000 cash pushed the total ₹5,000 past the limit and made all ₹55,000 taxable. The amount is added to Ankit’s income under “Income from other sources” and taxed at his slab rate. Diwali does not help: the department says “Apart from marriage, there is no other occasion on which a monetary gift received by an individual is not subject to tax.”
Who counts as a relative?
Any gift from relatives is outside this rule, whatever the amount. The department lists the relatives of an individual as:
- spouse
- brother or sister
- brother or sister of the spouse
- brother or sister of either parent
- any lineal ascendant or descendant, such as parents, grandparents, children and grandchildren
- any lineal ascendant or descendant of the spouse
- the spouse of any of the people above
Ankit’s mama is his mother’s brother, which is the “brother or sister of either of the parents” entry. His ₹1.4 lakh gold coin is therefore a gift from relatives and is not taxed. A cousin is not on the list, so a gift from a cousin is treated like a gift from a friend. The same goes for a sister-in-law’s brother or a family friend called “chacha”.
Gold, shares and other gifts in kind
Gifts that are not money are taxed only if they fall in a defined list called prescribed movable property: “shares/securities, jewellery, archaeological collections, drawings, paintings, sculptures, or any work of art, and bullion, and includes Virtual Digital Asset (VDA)”. If gifts in this list from non-relatives have a total fair market value above ₹50,000 in the year, the full value is taxed. The department’s page sets out this test separately from the test for money gifts.
| Gift | From | Taxed? |
|---|---|---|
| Gold coin, ₹1.4 lakh | Mama (relative) | No |
| Silver bar, ₹60,000 | Friend | Yes, full ₹60,000 (bullion) |
| Smart TV, ₹70,000 | Friend | No, a TV is not prescribed property |
| Car | Friend | No, a motor car is not prescribed property |
The TV and car rows come straight from the department’s examples: “Nothing will be charged to tax in respect of a television set received as a gift”. Ankit does not need to show the gold coin as income. If he later sells it, the capital gains rules for gifted assets apply, and a note of who gave it and when will help. Our guide on how much gold you can keep at home covers the record-keeping side, and our Dhanteras 2026 gold guide explains how coin prices are set.
Gift vouchers from your employer
The ₹12,000 in vouchers falls under a different rule, because a gift from an employer is a perquisite, part of salary. Rule 15 of the Income-tax Rules, 2026 says the value of such a perquisite “shall be ‘nil’, if the value of such gift, voucher or token, as the case may be, is below Rs. 15,000 in aggregate during the tax year.” The limit under the old rules was ₹5,000; Mint reported on 9 September that the ₹15,000 figure applies from 1 April 2026 under both tax regimes.
| Ankit’s employer gifts in 2026-27 | Total for the year | Taxable perquisite |
|---|---|---|
| Diwali gift vouchers only | ₹12,000 | Nil |
| Vouchers plus a ₹3,000 New Year hamper card | ₹15,000 | ₹15,000, not below the limit |
| Vouchers plus ₹12,000 cash bonus | ₹12,000 vouchers, cash separate | Vouchers nil; the cash is salary and fully taxed |
Two details matter. The limit is “below Rs. 15,000”, so a total of exactly ₹15,000 is not covered. And the limit applies to the total for the tax year, so a company that gives vouchers at Diwali and again at New Year may cross it. Any taxable amount appears in your salary slip and in Form 130, which replaced Form 16 under the new rules. Our guide on how to read a salary slip shows where perquisites are listed.
How Ankit’s tax on Diwali gifts adds up
| Item | Value | Taxable |
|---|---|---|
| Employer gift vouchers | ₹12,000 | Nil |
| UPI gifts from friends | ₹40,000 | ₹55,000 (aggregate crosses ₹50,000) |
| Cash gift from a friend | ₹15,000 | |
| Gold coin from mama | ₹1,40,000 | Nil |
| Total received | ₹2,07,000 | ₹55,000 |
If Ankit’s income puts him in the 20% slab of the new regime, the ₹55,000 would add about ₹11,000 plus cess to his tax bill, depending on his total income. He reports it in his return as income from other sources. Like lottery winnings, this income is listed under that head, though gifts are taxed at normal slab rates and lottery prizes at a flat rate.
What records to keep
Exempt gifts carry no tax. Even so, the tax department can ask where a large credit in your bank account came from. A short trail makes that easy to answer.
- For money from relatives, keep the bank or UPI record showing the sender’s name, and note the relationship.
- For the gold coin, a simple signed note from the mama with the date and value, plus the jeweller’s bill if he has it, will help if Ankit sells the coin later and needs its cost.
- For employer vouchers, keep the HR email or the voucher list, so the yearly total is easy to check against ₹15,000.
- For gifts from friends, write down each amount as it comes in. The ₹50,000 test is on the yearly total, and it is easy to lose count across Diwali, birthdays and a housewarming.
Had the friend’s ₹15,000 come from Ankit’s sister instead, his taxable gift income would have been nil, so for large gifts it matters more who gives than what the occasion is.
FAQs
Is a Diwali gift from my parents taxable?
No. Parents are lineal ascendants and are on the relatives list, so gifts from them are not taxed whatever the amount.
Do I pay tax if a friend gifts me ₹50,000 exactly?
No. The rule taxes gifts when the aggregate “exceeds Rs. 50,000”. At exactly ₹50,000 nothing is taxed. One more rupee from any non-relative during the year makes the whole amount taxable.
Does the person giving the gift pay tax?
The rules discussed here tax the person who receives the gift. The giver pays no gift tax on it.
My company gave a ₹20,000 phone at Diwali. Is it taxed?
A gift in kind from your employer generally falls under the same Rule 15 limit. At ₹20,000 it is not below ₹15,000, so its value would be treated as a taxable perquisite in your salary.
Disclaimer: This article is general information based on the Income Tax Department’s published material as of 3 October 2026. For large or unusual gifts, check with a tax professional.
