Gifting a tax

Gifting a tax: "The cash that one receives from friends as gift is considered as a part of income.

Gifts by taxpayers to their close relatives and others were brought under the tax net for the first time in India by the introduction of the Gift Tax Act, 1958 at the instance of Nicolas Kaldor who gave to India its “integrated system of taxation” where he recommended wealth tax, expenditure tax and gift tax to make a more complete picture with the then prevailing income tax on incomes and estate duty on estate passing on death.

This levy on gifts was recommended as a measure of plugging a loophole by gifts by wealthy persons just prior to death thereby escaping estate tax which could only be levied on wealth passing on death of that person."