Is There Any Tax-Free Limit for Gifting Money to a Married Daughter in India?

If you’re planning to gift money or valuables to your married daughter, you might be wondering whether there’s a tax exemption limit. The answer is reassuring - gifts from parents are completely tax-free under Indian law, but there are certain rules you should know to avoid any compliance issues.

How Gift Tax Has Changed Over the Years

The Gift Tax Act of 1958 once required the person giving a gift to pay tax. However, due to low revenue collection, it was scrapped in 1988, making all gifts tax-free for a while. But when loopholes led to widespread misuse, the government brought back gift taxation in 2004, this time making the recipient liable to pay tax if certain conditions were met.

Current Tax Rules on Gifts

Today, the law states that if a person receives gifts worth more than ₹50,000 in a financial year - whether in cash or kind - the total amount becomes taxable as their income. But there’s an important relief: gifts from specific relatives, including parents, are exempt from tax, no matter the value.

This means that whether your daughter is married or unmarried, any amount you gift her will not be considered taxable income. She doesn’t even need to declare such gifts in her Income Tax Return (ITR) because they are not categorised as income in the first place.

Is There Any Upper Limit?

There is no ceiling under the Income Tax Act on the amount parents can gift their daughter tax-free. However, cash gifts have an additional restriction. Each cash gift should be below ₹2 lakh per transaction if not made through a bank transfer. If this limit is crossed, the recipient must pay a penalty equal to the cash amount received.

You can gift any amount to your married daughter without worrying about income tax, provided you follow the cash transaction rules. Opting for bank transfers or cheques ensures smooth, penalty-free gifting, keeping both you and your daughter compliant with the law.