Section 56(2)(x) and a Crypto Gift

Section 56(2)(x) of the Income-tax Act taxes property you receive without paying for it, and a virtual digital asset is property for this purpose. It governs the arrival of a gifted coin. Section 115BBH takes over later, on the day you sell it.

Key highlights

Three things decide whether a gift you received is taxed.

₹50,000

Aggregate across the year, not per gift

Section 56(2)(x)

Exempt

From a relative, on marriage, or under a will

Whatever the value

Slab

Rate on the value where the gift is taxed

Income from other sources

What Section 56(2)(x) Charges

The charge attaches to receipt, not to disposal. Where a coin arrives in your wallet for nothing and the exemptions do not cover it, its market value on that day is income from other sources and is taxed at your slab rate. Nothing about Section 115BBH applies at that moment, because no transfer has happened on your side.

The line is ₹50,000, and it is an aggregate. Five separate gifts of ₹15,000 from five friends cross it together, and once crossed the whole amount is taxable rather than the excess over the line. That last part catches people out more than the threshold itself does.

Which Gifts Stay Outside the Charge

A gift from a relative as the Act defines the term is outside the charge whatever it is worth, and the definition is a list rather than a feeling about closeness: spouse, sibling, sibling of a spouse, sibling of either parent, any lineal ascendant or descendant, and the spouse of any of those. A cousin is not on the list. A friend never is.

Two other routes sit outside as well. A gift received on the occasion of your marriage is exempt, and so is property received under a will or by inheritance. Where one of these applies, nothing enters your return on the receipt side at all.

The Sale Afterwards Is a Separate Event

Whatever happened at receipt, selling the coin later is a transfer and Section 115BBH charges the gain at a flat 30% with 4% cess on that tax. The two events sit in different parts of the return: the gift, where taxable, goes to Schedule OS, and the disposal goes to Schedule VDA.

Giving a coin away is the quieter half of this. Nothing comes back to you, so there is no consideration for Section 115BBH to work on, and the donor side of an ordinary gift carries no VDA charge. Donating to a charity is read differently, because the gain up to that day is treated as crystallising, and a donation in kind carries no deduction under Section 80G.

Frequently Asked Questions

The questions this term raises most often.

No. A parent is a relative as Section 56(2)(x) defines the term, so a gift from your father is outside the charge however much it is worth. Selling the coins later is still a transfer, and that gain is taxed at 30% with 4% cess under Section 115BBH.

For the year. Gifts from people outside the relative definition are added together across the financial year, and if the total crosses ₹50,000 the whole amount is income at your slab rate, not only the part above the line.

The value that was brought to tax on receipt is the natural starting point, and where the gift was exempt the position is less settled, because Section 115BBH(2)(a) allows the cost of acquisition and nothing else. Both readings turn on facts, so this is a question for a chartered accountant rather than a page.

This page states the law and what CryptoKar computes from your trade history. It is not tax advice. Judgment calls belong with a chartered accountant. Sections and dates here were read against the source on 21 August 2026.

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