If I get ₹1 lakh from my grandmother's brother, can it be treated as a gift from lineage?

No. Any monetary gift received from the grandmother's brother cannot be treated as a gift from the lineage for taxation purposes.

As per the Income-tax laws, gifts received from certain close relatives are tax-free. The tax rules have specified who those relatives can be. Gifts received from any other relative in a financial year will be taxable if they are worth ₹50,000 or more.

"Under the Income-tax Act, 1961, gifts received by an individual are generally taxable unless they fall within the definition of ‘relative’ prescribed under Section 56(2)(x)," said CA Dr Suresh Surana.

Dr Surana said that the law provides an exhaustive list of relatives who qualify for exemption. In the case of an individual, this includes spouse, brother or sister, brother or sister of the spouse, brother or sister of either parent, any lineal ascendant or descendant of the individual, any lineal ascendant or descendant of the spouse, and the spouse of all such persons.

He further said that this definition of relative under tax rules is restrictive and specific. This means that any person not covered within the above list would not qualify as a relative for tax purposes.

Notably, a grandmother’s brother does not fall within the prescribed categories.

"Accordingly, any gift received from such a person would not be eligible for exemption," Dr Surana said.

Where the aggregate value of gifts from persons who are not specified relatives exceeds ₹50,000 in a financial year, the entire amount becomes taxable in the hands of the recipient under the head "Income from Other Sources". This amount is taxed at the applicable slab rates of the recipient.

If you receive ₹1 lakh from your grandmother's brother, this amount will be added to your total income as "Income from Other Sources" and taxed at the slab rates applicable to you. However, if your total income is below ₹12 lakh, you can avoid paying any tax under the new tax regime.