🎁 Taxability of Souvenir Gifts from a Trust
🧭 Step 1: Identify the Recipient
| Recipient Type |
Tax Implication |
| Individual / HUF |
Proceed to Step 2 |
| Company / Firm / AOP / BOI |
Usually taxable as business income unless exempt |
🎯 Step 2: Purpose of Gift
| Purpose |
Tax Treatment |
| Part of charitable/religious activity |
May be exempt |
| Personal benefit unrelated to charitable activity |
Proceed to Step 3 |
📊 Step 3: Value Test – Section 56(2)(x)
- Applicable if gift is not from a relative and is not exempt under special cases
- Threshold: Aggregate FMV of gifts > ₹50,000 in a financial year → Taxable as Income from Other Sources
🧾 Step 4: Special Exemptions
Gifts are not taxable if:
- Received on marriage of the individual
- Received by will or inheritance
- Received from a relative (as defined under Section 56)
- Received from a registered charitable trust as part of a public event or religious function (low FMV items like mementos)
👔 Step 5: Employee of the Trust
| Gift Type |
Tax Treatment |
| Occasional gift ≤ ₹5,000 |
Exempt as perquisite |
| Gift > ₹5,000 or regular |
Taxable as perquisite under Section 17(2) |
✅ Commentary:
- Gifts from unregistered trusts are more likely to be taxable unless covered under exemptions.
- Always consider documentation and intent—gifts linked to charitable purpose are less likely to be taxed.