From the next fiscal year onward, receiving gifts could become less enjoyable as the National Board of Revenue (NBR) plans to classify them as additional income. This means that individuals receiving gifts will have to declare them in their income tax returns by the end of the year. Similarly, the giver of the gift will also need to report it in their own income tax return. The measure aims to combat tax evasion and prevent the illegal transfer of income through banking channels disguised as gifts, according to a senior NBR official.
However, gifts received by an individual’s spouse, parents, or children will be exempt from this tax, although they still need to be included in tax returns. This proposed change, part of the finance bill, will subject all gift recipients and givers to taxes, resulting in both parties having to pay income tax at the standard rate.
Source for more details:
