Receiving gift in cash or kind can save you lot of taxes provided the gift is received from the permissible relative and within the annual limits. The main problems is faced by individuals when they look to receive or give gifts and is not being knowledgeable about when the gift would be taxable.
By Definition "Any gift received in cash or kind exceeding Rs.50,000 is taxed in the hands of recipient under the head income from other sources. However gifts received from specified relatives are exempt from Income Tax, and there is no upper limit on the amount.
Now the confusion is usually on the relative part. The term relative means following as far as gifts under income tax are concerned. A relative can be any of the following:
