How much can you pay someone without paying taxes?

Paying tax is an important part of all money transaction. We would
have heard many people saying that one paid someone under the
table, which means that it is an illegal way of making payment,
without providing the information to the tax authorities.
Apart from this illegal, there are also several legal ways of making
the payments and yet one can excuse himself from paying the tax.
When can one pay someone andyet escape from paying taxes?

Is this really possible?
The concept of no tax for the gift money received holds the key for
this issue.
When someone makes a donation of 3000 dollars to a
Non-governmental organization, does he pay tax on that?
No.
What is considered gift money?
Something of value in terms of property or cash, provided to us,
without any returns can be termed as a gift.
When we still are dependent (depending on our parents and not
working), the gift money provided to us by our parents, will not be
part of the taxable amount.

But once we lose the status of dependency and start earning, the
gift tax comes into play. There is a particular threshold amount
for gift, which will not be taxed. Hence we need not worry about the
money generously gifted to people, as long as it is below this
threshold limit.
A person can give up to 13, 000 dollars for a person in a year,
as a gift amount and he will not be taxed.
This is not the total amount and it is for each person.
For instance, when one provides 8000 dollars as gift to father
and 8000 dollars as a gift to mother, in the same year, the total
amounts to 16000 dollars.
But as each person is receiving just 8000 dollars, it will not be taxed.

The other important points on tax exemptions for gift money
would be as follows.
If we provide gift amount to our friend for an operation (close to
20 000 dollars), this amount will be taxed. However, when the money is provided to the hospital, there will be tax exclusion. Similarly, when we provide gift amount to a college, for the education of a child, this amount will not be taxed. For instance, when a large amount of money is given as a gift to organizations of political background or to those institutions belonging to the charity trusts, tax exemption is available.

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