Are Wedding Gifts In India Tax-Free? Check The Details Here

If you've ever been to an Indian wedding, you've probably seen the parents of the bride or groom receiving shagun, cash gifts from friends and relatives. Sometimes it's just a token amount; other times, it's quite substantial. But the important question is that the money is tax-free or not. You might assume that wedding gifts are free from tax. After all, it's a gift, right? However, a 2013 ruling by the Punjab and Haryana High Court states that it is not always the case.

According to a Business Standard report, Rajinder Mohan Lal, a resident of Chandigarh, received over Rs 21 lakh in cash gifts from friends and family at his daughter’s wedding. Which happens typically in many Indian households, and he even had proof that the money was shagun from well-wishers.

However, when he filed his income tax return for the financial year 2007–08, he didn’t report the Rs 21 lakh as income. The Income Tax Department disagreed and added the full amount to his taxable income.

Rajinder argued that the money was given on the occasion of his daughter’s wedding a cultural tradition, not a source of income. He also contended that the term “individual” in the Income Tax Act should be interpreted broadly to include parents of the bride or groom, since it’s customary for them to receive such gifts during their child’s wedding, the report added.

Also Read: Bank Holidays: Branches To Remain Shut For 12 Days In June 2025, Check State-Wise Holiday List Here

What The Law Said

The ITAT (Income Tax Appellate Tribunal) in Chandigarh, however, ruled against him. According to Section 56 of the Income Tax Act, wedding gift exemptions apply only to the individual getting married, not their relatives.

In other words, since Rajinder wasn’t the one tying the knot (his daughter was), he wasn’t eligible for the tax exemption. The Rs 21 lakh he received was considered taxable income.

As per the experts, the law specifically exempts gifts received “on the occasion of the marriage of the individual,” and that refers only to the bride or groom, not their parents or other family members. If you're a parent receiving generous wedding gifts on behalf of your child, those gifts could be taxable. The exemption is strictly for the person getting married, not for anyone else involved in the celebration.

business