New Delhi, Sept. 10 -- It is customary in Indian for families to exchange gifts on the occasion of marriage. This article addresses the tax implications of receiving such gifts.

Before the abolition of the Gift Tax Act in 1998, the donor (the giver of the gift) was required to pay gift tax on the value of the gift exceeding Rs. 30,000. After the abolition, neither the recipient nor the donor was subjected to any tax. This lacuna was grossly misused and which forced the government to bring in provisions to tax the gifts in the hands of the recipient in case the aggregate of all the gifts during a year exceeded a certain threshold limit.

Presently, this threshold limit is fifty thousand rupees. It is the aggregate value of all the gifts r...