How to express gratitude

Thank you! is the most common way to tell someone that you are grateful to the person. Some other ways are given below: 

1. Thanks.
2. Thanks a lot.
3. Many thanks.

These are informal and can be used between friends.

1. Thank you.
2. Thank you very much.

These can be used in most situations. They are neither very informal nor very formal.

1. That is/was (very) kind of you.
2. That's very good of you.
3. That's very nice of you.

These expressions are rather formal. They can be used to thank strangers, and people who have helped you in an official capacity.

1. I am (really very) grateful to you.
2. I am really very obliged to you.

This is a very formal way of thanking people. It is used mostly in writing.

How do people accept thanks? Between close friends there is no need to say anything at all! But when you really want to say something, you can use one of the following expressions: 

1. That's all right.

This is an informal way of accepting thanks.

1. Not at all.
2. It's a pleasure.

These expressions can be used in most situations.

1. Don't mention it.
2. You are welcome.

These are slightly formal expressions.