When it comes to giving money or property to your family, most people worry about the taxman showing up at the door. The truth is, Indian tax law is actually quite clear on when gifts are taxable and when they aren’t. If you know the basic rules, you can pass on money to your kids or parents without attracting any extra tax.

Gifts to close family are tax-free

The first thing to remember is that gifts to your immediate family—like children, parents, spouse, and even siblings—are fully exempt from income tax, no matter how big the amount is. So if you transfer ₹10 lakh to your daughter for higher studies, or give your mother money for a new car, there’s no gift tax at all. The Income Tax Act specifically exempts gifts from “relatives,” and this includes parents, children, siblings, and in-

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