When is gift tax return required

The provisions relating to gift tax have been dealt with under Section 56 2 x of the Income-tax Act, These provisions have been briefly captured in the form of the table below:. Provisions relating to considering the stamp duty value is similar to the provisions as per Section 50C. Let us discuss the provision for the purpose of gift tax in brief below:.

However, here are some exceptions to this. General caution: Due to extensive tax planning using gifts, gifts in India generally fall under the scrutiny of the tax department, especially if the quantum is huge.

Hence, it may be advisable to maintain documentation to establish the genuineness of gift received and sufficient source of funds with the donor to justify the gift. Thank you for your response. Are you a salaried employee? In , if you made substantial gifts of wealth to family members you may have to file a gift tax return.

Generally, a federal gift tax return Form is required if you make gifts to or for someone during the year with certain exceptions, such as gifts to U. While an unlimited amount can be gifted to a U. Finally, if you split gifts with your spouse, regardless of amount, you must file a gift tax return. The return is due by April 15 of the year after you make the gift, so the deadline for gifts is coming up soon.

But you can extend the deadline to October 15 by filing for an extension. Contributions to a college savings plan are gifts to the future student.

However, a special rule allows you to make a lump-sum contribution and spread it over five years for gift tax purposes.

Among others, the following types of gifts are exempt from the federal gift tax. You can make unlimited gifts in these categories without any gift tax or estate tax consequences and without having to file gift tax returns:. If you make a taxable gift one in excess of the annual exclusion , you must file Form U.

Each spouse must file a separate return if he or she makes any taxable gifts. If you choose to make a split gift, you must file Form , and your spouse must consent to the arrangement. This article only covers the basics of federal gift taxes. See also the instructions for Form Remember, with TurboTax , we'll ask you simple questions about your life and help you fill out all the right tax forms. Whether you have a simple or complex tax situation, we've got you covered.

Feel confident doing your own taxes. There are, of course, exceptions and special rules for calculating the tax, so see the instructions to IRS Form for all the details. Caring is sharing, but some situations often inadvertently trigger the need to file a gift tax return, pros say. Lending money to friends and family is usually a bad idea , and the IRS can make it even worse. It considers interest-free loans as gifts. Or if you lend them money and later decide they don't need to repay you, that's also a gift.

Guess what just happened? Limited time offer. Terms apply. See our full roundup of the best financial advisors. What is the gift tax? Do you pay taxes when you receive a gift?