Section 56(2)(vii) of Income Tax Act now clearly provides law relating to taxation of gifts received in cash or kind by an Individual. In plain and simple terms, the receipt of money in cash or kind is now tax free only if it is received from specified persons. One of them is relative of an individual. But the term relative has also been defined in the Explanation given under section 56(2)(vii) only. In general, the list of relatives who can give or receive the gifts are close blood relatives like son and daughter. So, when a person adopts a son or daughter, the question that generally arises is whether the adopted son as per a different law, can be considered a person included within the meaning of relative.