New Delhi, Nov. 6 -- This festive season, gifting is taking a smarter turn. From mutual funds to stocks and digital assets, gifts now come with compounding potential. But while gifting wealth-creating assets is thoughtful, and often tax-efficient in the long run, it's important to be mindful of the tax implications that may arise for both the giver and the recipient.

Not all gifts are tax free

Section 56(2)(x) of the Income Tax Act, 1961, governs the taxability of gifts. If you're gifting a financial asset such as mutual fund units or listed shares, here's the basic rule: if the value of gifts received by an individual or Hindu Undivided Family (HUF) exceeds Rs.50,000 in a financial year, the entire amount is taxed under "Income from Ot...