As of January 1, 2026, the federal Generation-Skipping Transfer (GST) tax exemption is increased to $15 million per individual, up from $13.99 million in 2025. For married couples, this allows for a combined exemption of $30 million. This lifetime exemption applies to both gifts and transfers at death to beneficiaries more than one generation younger.
GST exemption from registration
A person whose turnover falls below the threshold exemption limit—INR 40 lakhs for goods, INR 20 lakhs for services, and INR 20 lakhs (or INR 10 lakhs in special category states) for specified categories.
Generation-Skipping Transfer Tax Exemption: The GST exemption was also increased to $15 million per taxpayer for 2026, up from $13,990,000 in 2025.
Lifetime IRS Gift Tax Exemption
If a gift exceeds the $19,000 limit for 2025, that does not automatically trigger the gift tax. For 2025, the IRS allows a person to give away up to $13.99 million in assets or property over the course of their lifetime and/or as part of their estate.
The following category of tax persons are exempted from payment of 1% of GST in Cash 1. Registered taxpayers who have paid income tax above Rs 1.00 in Income Tax during the last two years continuously 2. Taxpayers who have zero-rated supplies without payment of duty and claimed refund of more than Rs 1.00 lac 3.
The GST exemption essentially allows the earmarking of transfers, made during lifetime or at death, that either skip a generation or are made in trust for multiple generations.
Section 269ST limits cash receipts to Rs. 2 lakh or more in a single day from a single person. Any cash payment or receipt exceeding this limit is prohibited.
The total of lifetime gifts and the estate are eligible for a lifetime exemption, which is set at $13.99 million in 2025. The exemption amount is indexed for inflation, and was scheduled to be reduced by half after 2025. The higher exemption level was made permanent and slightly increased to $15 million in 2026 by P.L.
The income tax slab rates under the new tax regime for FY 2025–26 are as follows: income up to ₹4 lakh is tax-free; ₹4 lakh to ₹8 lakh is taxed at 5%; ₹8 lakh to ₹12 lakh at 10%; ₹12 lakh to ₹16 lakh at 15%; ₹16 lakh to ₹20 lakh at 20%; ₹20 lakh to ₹24 lakh at 25%; and income above ₹24 lakh is taxed at 30%.
The federal government legislated temporary GST/HST relief on taxable foods and beverages, as well as other qualifying items, for a two-month period from December 14, 2024, to February 15, 2025.
To avoid the 22% tax bracket (or any higher bracket), focus on reducing your taxable income through strategies like maxing out 401(k)s and HSAs, deferring bonuses, tax-loss harvesting, smart charitable giving, and strategic asset location, understanding that higher rates only apply to income within that bracket, not your entire income.
Goods and Services Tax (GST) 2.0 reform, which came into effect from September 22nd, 2025, brought relief for the common people and boosts for businesses. One of the key GST updates under 2.0 reform is that it simplified the GST tax structure from a 4-slab (5%, 12%, 18% and 28%) to a 3-slab (5%, 18% and 40%).
GST is leviable only if aggregate turnover is more than 20 lacs. (Rs. 10 lacs in 11 special category States). For computing aggregate supplies turnover of all supplies made by you would be added.
The GST rates in India have been simplified to three main slabs: 5%, 18%, and 40%. The 5% rate applies to essentials and common household goods, the 18% rate is the new standard for most consumer products and services, and the 40% rate is for luxury and "sin" goods.
Non/Late Payment
A 5% penalty will be levied on the amount of tax unpaid by the due date and an additional penalty of 2% per month on tax remaining unpaid after 60 days from the due date of the prescribed accounting period (capped at a maximum of 50% of the outstanding tax) may also be imposed.
Yes, you can gift your son $100,000, but since it's over the 2025 annual exclusion of $19,000, you'll need to file a gift tax return (Form 709), though you likely won't owe taxes unless you've already used up your large lifetime exemption (over $13.99 million in 2025). Your son pays no tax on the gift, but you, as the giver, must report the amount exceeding the annual limit, which counts against your lifetime exemption.
For smaller gifts, an individual taxpayer can benefit from the annual gift tax exclusion, which allows you to gift up to $19,000 per recipient in 2025 ($38,000 for married couples filing jointly) without having to pay taxes.
Any gift from relatives are non taxable. Also any gift of other than relatives (eg. friends ) is tax free upto limit of Rs 50,000. Such gift can be in cash or in kind.
Specific individuals and businesses are exempt from GST registration, including: Agriculturists (Also read - GST Exemption for Farmers) Individuals and businesses with an annual turnover below INR 40 lakhs for goods and INR 20 lakhs for services (INR 20 lakhs and INR 10 lakhs for specified categories)
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
The GST/HST break includes certain qualifying goods, such as:
The ₹10 Lakh Cash Deposit Rule
At the heart of the discussion lies the widely known ₹10 Lakh Rule. Under current regulations, if the total cash deposits in a savings account exceed ₹10 lakh during a financial year, the bank is required to report this activity to the Income Tax Department.
Implications of Section 269ST
For real estate buyers and sellers, this means property transactions must flow through banking systems. Cash payments for property purchases are effectively prohibited since they typically exceed Rs. 2 lakh.
Introduced in House (02/07/2025) This bill requires retail businesses to accept cash as a form of payment for on-site sales of $500 or less and it prohibits them from charging cash-paying customers a higher price compared to customers not paying with cash.