New Delhi, Nov. 10 -- Bhai Dooj celebrates the bond between brothers and sisters, with gifts and financial support often forming part of the occasion. Some brothers may choose to go beyond traditional presents and transfer a substantial amount of money to their sisters. A Rs.5 lakh bank transfer, for instance, may appear to have tax implications, but the Income-tax Act provides an exemption for genuine gifts exchanged between specified relatives.

Under the Income-tax Act, 2025, which came into effect on 1 April 2026, money received by an individual from a brother or sister is exempt from income tax, irrespective of the amount. However, this exemption does not mean that siblings can exchange large sums in any form. Separate provisions res...