New Delhi, May 18 -- Although the Income-tax Act, 1961 (ITA 1961) has been replaced by the Income-tax Act, 2025 (ITA 2025) with effect from 1 April 2026, the gift transaction under consideration was undertaken during FY 2025-26.

Accordingly, the provisions of Income-tax Act 1961 would apply in the present case. This is because the taxability of a transaction is generally determined based on the law applicable during the relevant financial year in which the transaction took place.

Under the Income-tax Act, 1961, gifts received from certain 'relatives' are exempt from tax in India, irrespective of the amount involved or the mode of transfer.

In the case of an individual, the term 'relative' includes any lineal ascendant or descendant of ...