15 Feb Is receiving money from friend through e-wallet taxable

Through e-wallets and UPI, it has become easy to send and receive money through your phone. Often, debts to friends may be settled in this manner. For example, you’re at a restaurant with your friends, and you pay the whole bill, while everyone pays you through an app or via UPI. Do such receipts need to be declared in your returns? Simply, such receipts may be treated as gifts, and gifts up to a sum of Rs 50,000 are exempt from gift tax. But if bigger amounts are transferred between friends,the entire amount will be subject to tax.

If the receipts of your wallets or savings account are settlements of debts owed to you, you don’t need to pay taxes on them. However, in case there is further scrutiny of your accounts by the Income Tax Department, you may want to take a written note from your debtors stating that the transaction was indeed a settlement of debts.

Source: Economic Times