This question pertains to income tax in India. Suppose a person receives some money via crowdfunding. This may have been through a crowdfunding website, or from friends by sharing messages on WhatsApp and/or social media. The purpose is for medical treatment of the person/his close relative, and the person has the hospital bills to prove the case. Also assume that the total amount received is such that, according to existing tax slabs, an income tax is applicable.

Section 56 sub-section (2) clause (x) sub-clause (a) of the Income Tax Act, 1961 states that any money received, without consideration, the aggregate value of which exceeds INR 50,000 is classified as "Income from other sources" and the whole amount is subject to income tax. Under the same clause, it is also written that the clause shall not be applicable if the money is received from certain sources or on certain occasions, like from a relative, on the occasion of marriage, or through a will or by inheritance. Money received via crowdfunding or from friends for medical treatment is not explicitly mentioned to be exempted, which probably means that the money is taxable.

I am a layman and hence the above is all that I could find after a lot of searching. It doesn't seem appropriate if people are donating money for medical treatment and then the Govt. subjects that to income tax. Is there any other place in the Act, or any judgement of the Supreme Court, which exempts such money from income tax?


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