Did you know that gift-giving is one of the oldest of human activities? It dates as far back as the origin of our species! With gift-giving being an indispensable part of Christmas, let’s explore the evolution of gifting, the psychology behind it, and of course, the financial implications of a gift, if any. 🙂
Right from the stone-age, natural items such as the bark of a tree or the tooth of an animal have been a part of the gifting culture. As humankind developed, gifts became more elaborate, with jewellery and showpieces leaving their mark, quite literally.
The Psychology of Gifting
If you’ve read the short story, “The Gift of the Magi” by O. Henry, published in 1905, you know that it is one of the most beautiful tales about gifting ever told. Whether it is to show love and affection for one another, or to mark an important occasion or achievement, or to simply show appreciation for a job well done, the practice of gifting is ingrained in our DNA. While the kinds of gifts we give each other has evolved over the centuries, the purpose of gifting, and the feelings associated with it, remain unchanged.
Research says that the act of giving something to somebody you care about enhances well-being, of the receiver as well as the giver. A thoughtful gift, be it a weirdly shaped rock you picked up for your traveller friend, a book that your brother or sister might value, or a cake you baked at home for your parents, can do wonders for greater social connection. Gifts build bonds. They release endorphins that benefit us, boosting our mood and improving our state of mind. It is a form of expressing our feelings. And it is contagious.
Ripple Effects
Picture a pebble thrown into a still pond. The ripples it creates is clearly visible. Much like this rippling pond, the positive effects of gifting, and of generosity, in a broader sense, are palpable. We are social creatures; we love giving and receiving. Earlier this week, we ran a poll on our Instagram account that proved just how true this is.
We asked people a few questions about their gifting habits. And we received some interesting statistics from over 100 people that participated in this poll. Here are a few:
When asked to recall the best gift they’ve ever received, the responses flooded in, and how! Some of our favourites, in no particular order were,
- a musical instrument
- a trip to Mcleodganj
- home-baked cake
- a board game that I loved playing
- mutual fund from my father
- a trip to a dog care
- plants
- the complete set of Calvin and Hobbes
How to Budget for Gifts
Sometimes, picking the perfect gift can take ages. Sometimes, you instinctively know what you want to get, especially if the gift is for somebody you know in and out. Whatever your choice of gift is, setting a budget for specific occasions is indeed a good practice. What’s even better is to set aside an amount every month that’s specifically for gifts.
For instance, say there’s a birthday coming up, and I decide not to spend more than “x” amount on the gift. If I take this one step further, I could set aside “x” amount every month solely for gifts, irrespective of the occasion. Then, when the occasion does arise, I can spend based on what I want to get the person. This way, I have a wider choice, without my finances going through huge fluctuations.
Other Financial Aspects of Gifting
In India, with the number of festivals we celebrate, and the scale at which some weddings take place, we are a part of frequent gift-exchanges. Happy occasions like this could also sadly be an easy way for people to redirect their income and evade taxes. To stop this from happening, the government introduced the Gift Tax Act in 1958. Later, in 2004, this Act merged into the Income Tax Act.
There are a few pertinent things to note about taxation of gifts. All gifts, whether received in cash or in kind, are taxable, barring a few exceptions:
- Gifts valued less than ₹50,000 are not taxable
- Receiving gifts from certain relatives is exempt from tax, regardless of the amount – parents, grandparents, spouse, siblings, children
- Any gifts received on the occasion of marriage are also fully exempt irrespective of the amount
- Gifts received by way of will or as inheritance are exempt
Apart from the exceptions, gifts exceeding ₹50,000 will form part of your income, under the head “Income from Other Sources”. This is taxed at the normal rates of income tax. As an example, say you receive a laptop worth ₹60,000 from a friend. The entire ₹60,000 is treated as income and is liable to tax.
Remember Bagwati, from Zindagi Na Milegi Dobara? Natasha, (Kalki Koechlin), would have surely had to pay a hefty tax on the bag she received from Kabir (Abhay Deol), seeing as it was worth 12,000 euros and they weren’t married yet!
Objects or Experiences? Vouchers or Your Time?
As a recipient of a gift, what would you prefer getting? An object, like Bagwati? Or an experience? Or would you rather get the gift of choice – a voucher?
Being specific with the gifts we give means that we have put in time and effort, and really thought about what the recipient would find most beneficial. This investment cannot be quantified in monetary terms. And as we saw from the list above, we clearly love gifts that are specific to us, not general.
In a recent Speaking Tree column of the Times of India, writer, Narayani Ganesh, made a sound case for gifting experiences over objects. She summarises the article beautifully, saying,
“At the end of the day, memories are all one is left with. Objects tend to lose their value sometimes literally, and at other times, metaphorically. But memories stay, and memories are made up of experiences.”
No matter what gifts you give, or what gifts you receive, remember that generosity and gratitude go hand-in-hand. The more you have of one, the more you’ll have of the other. However big or small the gesture, making the effort is what makes all the difference in the world.
So this Christmas, think about what a simple act of giving, of gifting, can do. Lift up those around you. Put in that little extra time and effort into picking the gift. And if you’re looking for a feel-good film to get some inspiration over the holiday weekend, “The Ultimate Gift” would be the perfect choice.
Merry Christmas and Happy Holidays, from us to you. 🙂
