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Diwali gifts and tax: the ₹50,000 limit, gold gifts and employer gifts in 2026

Gifts from relatives are tax-free. Gifts from friends, gold included, are taxed in full above ₹50,000 a year. Employer gifts below ₹15,000 count as nil.

By Saifu team · 5 November 2026 · 3 min read · Reviewed by Chandan Kumar Dash

Diwali is on 8 November 2026, and many people will give or receive money, gold coins and jewellery. The tax rules are simple, but the ₹50,000 limit works like a cliff. Here is what the Income Tax Department says for the tax year 2026-27 (1 April 2026 to 31 March 2027).

Gifts from relatives are not taxed

Money, gold, jewellery and other bullion that you receive from a relative are not charged to tax, however large the gift is. The Income Tax Department lists these relatives for an individual:

• your spouse
• your brother or sister, and the brother or sister of your spouse
• the brother or sister of either of your parents
• your parents, grandparents, children and grandchildren, and those of your spouse
• the spouse of any of the people in the last three points

For a Hindu Undivided Family (HUF), any member is a relative. Friends, colleagues and cousins who are not in this list are not relatives for the gift rule.

Gifts from friends and others: the ₹50,000 limit

For money, the department says a gift is taxed if the total you receive without payment in the year goes above ₹50,000. For jewellery and bullion, the same limit applies to their fair market value. Gold coins, gold jewellery and silver are in that group. A television or a phone is not.

The limit is on the total for the whole year, not on each gift. Once the total goes above ₹50,000, all of it is taxed, not just the part above ₹50,000.

Our example: you get ₹30,000 from a friend at Diwali and gold worth ₹25,000 from a colleague in March. The total is ₹55,000, so the full ₹55,000 is added to your income and taxed at your slab rate. If the total is ₹43,000, nothing is taxed.

Occasions that are tax-free

The department says marriage is the only occasion on which a gift from a non-relative is not taxed. That means a gift received on your own marriage. Gifts under a will or by inheritance, and gifts made in view of the giver's death, are also not taxed. Birthday and anniversary gifts from friends are taxed once the total crosses ₹50,000. Diwali is not a listed occasion either.

Gifts from your employer

From 1 April 2026, Rule 15 of the Income-tax Rules, 2026 covers gifts, vouchers and tokens that your employer gives you or your household, on festivals or otherwise. Their value is the amount of the gift. It is nil if the total in the tax year is below ₹15,000. The limit is one total for the whole year, so a Diwali hamper and a work-anniversary voucher are added together. A cash bonus is part of your salary and is taxed at your slab rate.

What this means when you sell the gold later

A gift that is not taxed when you receive it can still be taxed when you sell it. If you sell gold at a profit, capital gains tax can apply. Check the current rules or your tax adviser before you sell.

What to do now

• Keep a note of who gave you what, with the date and value, and add up gifts from non-relatives.
• If a friend or relative gives you gold, ask for the bill. It shows the value and the date of purchase.
• Check your payslip or HR note to see how your employer treats Diwali gifts.
• Use the income tax calculator to see what extra income would cost you.

This is general information about tax rules and not tax or investment advice.

Sources: Income Tax Department: Tax treatment of gifts received by an individual or HUF (Income-tax Act, 2025 as amended by the Finance Act, 2026), Income Tax Department: Income-tax Rules, 2026, Rule 15 on valuation of perquisites, ET Now: Diwali 2026, planning to gift gold, 2 November 2026

Rules, rates and limits change. Check the official source linked above before you rely on a figure here. Posts never contain referral or affiliate links from the writer.

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