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Last Updated On 01-Apr-2026
Tax

Income tax on gift given to infulence a behaviour or gratification amount

Mr P, who has some documentary evidence of Tax evasion and money laundering indulged by ABC Ltd . Therefore ABC Ltd promises to give X amount to Mr P with a request not to lodge tax evasion/money laundering complaint . Mr P will receive the said amount through account transfer and not in cash. Would like to know the implication of Income tax as far as Mr P is concerned.

( Raigad, Maharashtra )

31-Mar-2026

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A.
Dear Client,

The amount described in your query will not be treated as a genuine gift under income tax law. Any money received in consideration of not filing a complaint or suppressing information may be treated as income from other sources or unexplained income and will be taxable in the hands of Mr P as per the Income Tax Act.

Further, such a transaction may also attract serious legal consequences beyond taxation, including possible criminal implications. From a tax perspective, such receipts are likely to be scrutinized by the authorities and will not get any exemption as a gift. It is advisable to consult a qualified professional before proceeding further.
Posted On 01-Apr-2026
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