Legal Question in Tax Law in India

Under the new law, any gift received in cash or kind exceeding Rs.50,000 or purchase of movable or immovable property for inadequate payment is taxed in the hands of recipient as �income from other sources.� The above rule does not apply to gifts in cash or kind received from relatives. While receiving a gift, it�s always in the interest of the donee (i.e., the recipient) to get a gift deed signed by the donor. This can always help support the case that the item was indeed a gift and can be used as evidence in case of future litigation/investigation by the tax department. Additionally, care should be taken when making a gift to a spouse or son�s spouse, because gifts received by them will be exempt in their hands, but any income earned from the gift will be clubbed with your income