We love getting gifts. Gifts might involve a lot of emotion and tradition. But we have to consider practical and mundane things like rules and taxation when it comes to gifts in terms of cash or assets.
NRIs can give and receive gifts in cash or kind (jewelry, antiques, property) to and from relatives and non-relatives in India. Check NRI Gift rules & exemption limits…
You can also get NRI Gift Deed Format from the end of this post
NRI Gift Tax India
Let us look at the tax implications of gifting for NRIs but first check basic definitions which will help you in understanding the rules & other issues.
Definition
The Income Tax Act defines gift as any asset received without consideration like money or money’s worth. It can include cash, movable property, immovable property, jewelry etc.
Relatives and Non-relatives
The treatment of gift tax is different when given to relatives and when given to non-relatives. The following people are considered relatives –
| Father | Child’s Spouse |
| Mother | Grandchildren |
| Stepmother | Grandchild’s spouse |
| Spouse | Siblings |
| Children | Stepsister and Stepbrother |
| Stepchildren | Siblings’ spouse. |
| Grandparents |
All other persons are considered non-relatives.
NRI Gift Rules
- Immovable property can be gifted to an NRI provided the remittance of sales proceeds does not exceed USD 1,000,000 per year.
- NRIs can get gifts from relatives in the form of shares and securities provided the gift does not exceed 5% of paid up capital of the company; the sectoral cap is not breached and the NRI is eligible to hold the securities.
- Gift received from a specified trust, specified fund or as a scholarship from educational institutions is not taxable.
- If the gift is an immovable property outside of India, it is exempt from tax.
- The value of the gift cannot be considered as deduction while calculating income tax.
- Income received from a gift in India is taxable in India whether the receiver and giver are Resident Indians or NRIs.
- When you receive a gift, make sure the necessary documentation is in place.
- Cash gifts that exceed Rs. 2,00,000 can be subject to penalty. Ensure that you get the relevant gift through cheques or bank account transfers.
Gift by NRI to Resident Indian
NRI gift to Resident Indian – Let us look at the different scenarios when an NRI gifts a Resident Indian –
- Gift from NRI Relative are exempted from tax – When an NRI gives a gift in the form of cash, cheque, items or property to a Resident Indian who is a relative, both giver and receiver are exempt from tax in India.
- When an NRI gives a gift in the form of cash, cheque, items or property that is within the value of Rs. 50,000 to a Resident Indian who is not a relative, both giver and receiver are exempt from tax in India.
- When an NRI gives a gift in the form of cash, cheque, items or property that exceeds the value of Rs. 50,000 to a Resident Indian who is a non-relative, gift tax is payable by the receiver. The amount is added to the receiver’s income and taxed as per the income tax slab applicable to the receiver.
- When an NRI gives a gift in the form of cash, cheque, items or property to a Resident Indian for marriage or through will, both giver and receiver are exempt from tax in India irrespective of the ‘relative’ status.
Gift to NRI by Resident Indian
Resident Indian gives a gift to an NRI – Let us look at the different scenarios when an NRI receives a gift from a Resident Indian –
- Gift to NRI Relative are exempted from tax – When a resident Indian gives a gift in the form of cash, cheque, items or property to an NRI who is a relative, both giver and receiver are exempt from tax in India.
- When a resident Indian gives a gift in the form of cash, cheque, items or property that is within the value of Rs. 50,000 to an NRI who is not a relative, both giver and receiver are exempt from tax in India.
- When a resident Indian gives a gift in the form of cash, cheque, items or property that exceeds the value of Rs. 50,000 to an NRI, who is a non-relative, the gift tax is payable by the receiver. The amount is added to the receiver’s income and taxed as per the income tax slab applicable to the receiver. The maximum limit for such a gift is USD 250,000 in one financial year. [This limit is defined under LRS (Liberalised Remittance Scheme) – the total amount of foreign exchange purchased from or remitted through, all sources in India.]
- When a resident Indian gives a gift in the form of cash, cheque, items or property to an NRI for marriage or through will, both giver and receiver are exempt from tax in India irrespective of the ‘relative’ status.
- When a resident Indian gives a gift in the form of shares or securities of an Indian company, the total value cannot exceed USD 50,000 in one financial year. The gift should follow the regulations of RBI regarding NRIs holding stock in Indian companies.
“When you give a gift or get a gift, make sure you understand the rules regarding gifts and the tax implications and act accordingly.
wiseNRI
The information that I shared in the above post is one part of the story – issues can be complex based on your resident status. If we talk about USA – you can gift up to $15,000 in a year. This is not that simple but just an example. So check rules in countries where you are staying.
NRI Gift Deed Format
It’s important to sign gift deeds & keep them safe to avoid issues in the future. Many readers were asking for sample NRI gift deeds that they can copy. So I have added ready to use gift deed format for immovable property & even movable property.
Please share any additional information or experience that you have about a gift to NRI or gift from NRI – that will really help all readers. If you have any questions related to NRI gift tax – feel free to add in the comment section.
The limit to gift to US NRI is 15 K in 2018, every year it is revised.
You need to define who are all relatives.
Useful article, may add a para on bank/ IT formalities as well. SOme banks ask for specific forms from auditors to send gift money to NRIs.
Thanks for your suggestions – I have updated US NRI limits.
How are cash transfers by a resident or NRI father to resident son through net banking are treated for tax for giver as well as receiver?
Dear Sanjay,
If I assume son is major – in that case, there are no tax issues in India. But to show that transferred amount was a gift – one can write a simple gift deed.
In case of a minor son – any income from such transfer will be added to father’s income.
As resident indian, I want to gift my NRE daughter $ 10,000. What does it mean by ” it is tax exempted in India for giver and receiver. Can the giver reduce this gift amount from his taxable income. What is limit for giving US$ as gift to NRI relative.
Hi Vimal,
Sorry I am not able to understand this “Can the giver reduce this gift amount from his taxable income” – this is a gift & not donation.
Gifts either in India or USA are NOT tax deductible.
Husband is NRI, and he is gifting money to his wife who is resident indian. This transfer is from husband’s NRE account to wife’s Resident saving account. If she does the FD and earns interest income. Taxation point of view, who will have to pay tax on this income husband or wife?
Hi MK,
In the case of wife or minor kids – clubbing of income will apply. Husband will pay the tax.
Thanks for a very informative post. I have a question: A NRI transfers rs. 10.000 every month from his nri account to his resident indian brothers savings account in order to assist him financially. Is this deal taxable? If yes, who has to pay and how much?
Hi nutan,
If a NRI gives Gift to Resident Indian (Relative),it is exempt from tax in hands of both receiver and giver.You are sending money through bank transfers amounts to RS 120000 yearly. Your brother can claim this amount as gift and it is exempt from tax in his hand. Remember this Gift should be backed up by gift deed to claim exemption
In India receiver pays gift tax. Receiving Brother is a relative and any amount of gift from a relative (brother/sister) is NOT taxable to him in India. But there may be taxation to giver in the country of residence. Please check on that. In USA the giver of gift is taxed if the yearly amount of gift exceeds USD 15000/- (Rs.10,50,000/-approx.). But your yearly total gift amount is only Rs.1,20,000/-. So No Tax in USA. Check tax rules if you are residing in any other country.
1. with reference to the point that NRI relative can receive gift in form of cash,cheque items or property from resident relative, is there a limit on the amount in cheque/cash that can be given to the NRI?
2. are uncles, nephew, neices included in relatives definition for any such gift deeds?
Hi shrikant,
1. Cash gift that exceeds Rs 200000 is subject to penalty and other than that is tax free
2.You can check relative list above in this Article
Can I take gift from my nri son at my huf file
Hi Ajay,
Yes, you can as your son is member of your HUF
Gifts received by HUF from its members is exempt. But gift received by HUF from relatives of members shall be taxable.
I am a NRI. I want to send money from my US account to my brothers resident acccount a sum of Rs 10 lacs as a Loan or gift .Can I do that
Hi rohan,
Yes you can do that as you are NRI and your Brother is relative.If you are giving that amount as a gift, your brother can claim gift exemption regarding this.
I am NRI and my wife stay in India. How much money I can give to my wife in a year through Cheque or bank transfer
Hi Tushar,
There is no limit on Cheque or Bank transfer but there is a limit on cash gift which is Rs 200000. Above this amount, there is a penalty
what all documents needed to gift a property to indian resident by NRI?
My son is working in Nigeria and he wants to send gift in dollar to my and my wife account and also he wants to send gift in dollar to my huf account, can it tax free income in India. please confirm
Hi Ajay,
As your son is relative to you and your wife , there is no gift tax in your’s and your wife’s hand whether you receive gift in dollors or rupees.And Gifts received by HUF from members is exempt from tax. Remember that such gifts should be backed up by gift deed.
My daughter in US is a neighborhood. How much can she gift mother and sister in 2019 from her nro account.
Mother and sister residents on India, staying in India. Will she have to show the gift given to her tax consultant in the US if it’s below the limit?
Hi SW,
My understanding is she can easily gift $14000 to her mother.. not sure about sister.
Does a British national with OCI Card have to pay gift tax when receiving cash from Indian relatives as gift
Can my sister-i-law & her husband gift me money above Rs.20Lakhs from USA, & not attract tax?
Hi Avi,
As you see above in the Article, Sister-in-law and her husband are not covered in Relative definition. From non relative you can receive gift tax free upto 50000rs and beyond that only on specific occassion like on marriage or through will.
Does an NRI having stock market investments have to pay taxes on the capital gains before repatriating funds from India to his / her overseas bank account and at what rate?Can NRIs also file their returns online
?
Yes Abhishesh – NRIs have to pay capital gain tax
https://wisenri.com/tax-rates-for-nri-indian-income/
Can nri gift to brother children wife? How much gift allowed to gift by us citizen (nri). To relative in 1 year
Dear Subhash,
Yearly limits are revised every year – right now it’s $15000 per year. Regarding “Can nri gift to brother children wife?” – I will suggest you to check with US CPA.
My father has a property (vacant land) under his name & he purchased this property in 2005 for Rs.10Lakh and now it’s worth Rs.20 Cr. I am an NRI and I would like to understand what is the best option to minimise the tax / CGT.
1) option#1: I receive the land as a gift from him, I sell the land and transfer the sale proceed to my overseas bank account via my Indian bank account
2) option#2: He sells the land and transfers the money to my bank account as gift and I transfer the money from my Indian bank account to my overseas bank account
I understand that there are other factors like FX and taxation laws of my residing country. I’d like to understand if there is any other (legally abiding) option that is better from a financial perspective.
Thanks for your help & guidance.
Regards.
My suggestion is you should hire a CA for this.
Joint flat owners. Husband n wife. Husband NRI wife resident indian. They want to sell this flat. To avoid high TDS upto 23.92% can the NRI gift the flat to wife and then wife sells the flat immediately so that TDS is 1%
Hi Surendra,
Regarding this, its better to consult a CA
My brother is a NRI and he is planning to send me Rs 2000000 as a gift. I am a resident Indian.
Hi Krish,
Yes, you can receive it, as your NRI brother is relative. Both giver and receiver are exempt from tax in india. Ensure that this gift should be backed up by gift deed for reference.
I have sold a property in India and paid the capital gains tax etc. The money is in my NRO account . I am a NRI based in UK. Can I remit the tax paid money as gift to my son and daughter in their UK bank account from my NRO account ?I have the CA certificate as well. Is there a limit how much can I remit outside India ?
Hi Brij,
As your Son and Daughter are both relative, you can remit this amount as gift and no gift tax attracted to both receiver and giver.But remittances from NRO to NRE account are limited to USD 1000000 in a financial year.And further proper documentation is needed to send this money. You should hire a CA for this.
What are the income tax implications of transferring funds from one NRE account to another NRE account. The NRE accounts are under different account holder names and different banks.
Dear Naman,
It’s a gift, loan or just normal transfer in the family.
I am a NRI (now USA citizen) in old age. I want to gift my life’s savings which are in NRO account in India to my children in USA (who also are USA citizen). What is the limit of transferring money from Indian NRO account to their USA as a gift? What documentation do I need to submit to my bank in India?
Hi Mohan,
The limit of transferring is upto 1 million USD in one financial year. Mainly, you need to submit two documents 15CA and 15 CB.
Form 15CA is an undertaking by the NRI to remit Funds and this form is submitted online and acknowledgment should be signed and submitted along with form 15CB in bank. Form 15CB is a CA certificate
Hi,
I’m a resident Indian. I would like to gift INR 7 lakhs to my paternal uncle (Tauji) who lives in the USA. I would like to transfer the money to his NRO account via NEFT transfer from my SB AC.
What are the Tax implications and FEMA regulations compliance should I consider for the transaction?
Thanks,
I want to send 400000 for my grandmother is taxable
Bank says I cannot gift sharesTo my children who are non-resident but your article here says otherwise how do I resolve this
Hi Suja,
You can gift shares to your children as they are relative to you provided RBI approval is required and regulations & compliances are required to be fulfilled like gift does not exceed 5% of the paid up capital of the company, sectoral cap is not breached, total value cannot exceed 50000USD in one financial year etc. Its better to consult a good CA for such matters
Gift Given to nri,it is taxable for payer and If income is chargeable to tax in India and any relief is claimed under DTAA-?or not
Hi AG,
First we should check whether NRI is relative or not, If he/she is relative then both receiver and giver are exempt from tax in india.
If NRI is non-relative then subject to certain exemption as mentioned above in article, gift tax is applicable and receiver have to pay tax in india. Regarding DTAA, its better to consult a good CA.
The gift in the form of a cheque from Father in Law is taxable for an NRO account?
Hi Arya,
Child’s spouse is covered under relative definition and NRI( father-in-law) can gift through cheque to resident indian, who is a relative and both receiver and giver are exempt from tax in india.
Please advise gift tax laws in case if grand parents in India have life insurance policy for minor grand children in USA as gift having US citizenship at the time of maturity
If we take property from nri person we r resident Indian how much tax calculate
Hi Radhey
If resident receives property from NRI relative then it is exempt from tax in India but if NRI is non-relative then the value in excess of Rs 50000 is taxable as gift tax in India. It is better to hire a CA for proper tax calculation
Gift in foreign currency from a relative received in India ?
Hi Shiva,
As per rules, residents are permitted to hold foreign currency upto 2000 USD or equivalent provided the foreign exchange was acquired by way of gift from resident outside india and who is on a visit to india
i want to know if i have to pay tax on money received from my brother living in U.K
Hi Amit,
If you are receiving the money as a Gift from your NRI brother,who is a relative then it is exempt from tax for both receiver and giver in india. Remember transaction should be backed up by gift deed
Can My son who is currently studying in the US on a F1 Visa,gift me any amount he wants from his resident SB account in India.He is not yet a NRI. Will there be any gift or other tax applicable to both.He files Non resident 1040Nr-Ez returns in the US and normal resident IT returns in India
Hi,
I am an NRI and my sister who is a resident of India deposits a check for Rs. 10,00,000 to my NRE account as gift, what documents should be given to the bank?
Thanks.
Is money received by resident sister from NRI sister NRE account fully covered by the gift tax exemption to relative law, regardless of the amount received over a period of 4-5 years ? Is this law about to be changed by the Indian govt anytime soon ?
If the NRI sister becomes a PR of any country will this PR status better safeguard the resident sister from being taxable for the gifts received via bank transfer ?
If i receive gift in the form of cash from my dad who for time being is an nri but later in the year he visits India and becomes a resident as per Sec 6, will that amount be taxable?
Hi, I am NRI and in Germany would like to buy a flat for my mother in India. The flat costs around 40 lakh and I have all money in my HDFC NRE bank account. Can I simply send the money to my Indian brother account, so that he can tranfer the money to the seller directly and my mother can have a flat. I just want to know what would be the best scenerio to avoid any kind of hassle. Thank you
It will be better if you can directly transfer that money to your Mother.
Hw much nri brother can make a gift to married sister
My son born in India obtained US citizenship before 7 years. He also holds PIO status. He has NRE AND NRO Saving Bank Account’s. My mother or my unmarried 71 years old sister wants to gift him INR 40,000-50,000. Obviously, cheque should be deposited in his NRO SA. Can he receive this cheque? Is gift deed necessary? If so, on Judiccial stamp paper of Rs 20/- is OK? Is it to be notorised?
My brother is an OCI , he wants to gift his inherited property tbrough a general poer of attorney . Is it legally allowed ?
Hi Sukumar,
Regarding legal matter, its better to consult a CA/ Lawyer
If a friend transfers about Rs. 10000 to 15000 Rs. every month to my savings account from USA to India will I be liable to pay tax on the same
Is money transferred to sister who is a resident in India from NRE account of NRI (self) fully covered under gift to relative exemption as specified numerous times above and is this law likely to be changed anytime soon by the Indian govt ? Also if the NRI becomes a PR of any country will that safeguard resident sister better from paying tax on the gifts received via bank transfer ?
Is a monetry gift of 25 lakh from my late father’s brother – free from tax? Firstly is he considered a relative for tax purposes and secondly, as a resident in the UK, british citizen with OCI, how do I bring the gift back to the UK?
How much USdollar can an indiindivi in india recerec fromfan NRI in a year
Hi Rajesh,
If NRI is giving gift to relative in india , there is no monetary limit.
But there is a limit of $14000 per person per year for gift tax free transaction. Any amount above this would be taxed as gift tax
Father and son are NREs can one transfer funds from sb acct to another
I paid 10 lakhs from my NRE account to my fathers saving account account in india…is that taxable?
Hi Rizwan,
There is no question of tax on such transfers.
Can a person a foreign national residing in India gift his Commercial property to his son who is also a foreign citizen Non resident in India
if i transfer money from my nre or nro account to my savings Resident account then will be the amount taxable which is in savings account.
My husband and me, we are NRIs. My husband wants to gift me his flat in India but I am not in a position to goto India immediately. How do we make sure the gift deed is done?
Do I need to pay tax if I want to send chocolates to India from Europe?
Can an Indian being a father make a gift of Rs. 35 lakh to his NRI son for purcahse of property in India? Money will be deposited in his NRO Account. What is limitation?
I have a property in India and I have OCI.I want to sell that property b ut will attract 20% capital gains. Would I be able to gift it to my father who is an Indian citizen and he can sell it with 1% taxWhat do you think? Is there any other implication?
Hi Ashok,
I will suggest you to hire a good CA for tax planning
If I (a resident individual) received gift (money in my bank account) from NRI (relative/non relative) then is there any FEMA compliance or any ceiling limit on such gift amount.Kindly also give section/rule reference.
Can I receive money from my cousin living in australia. Is it taxable in india. He is my mum’s sister son.
Hi Sudha,
Your mums sisters son is non relative for gift tax purpose.If you receive gift upto Rs 50000 it is exempt but beyond this limit it will be taxable in the hands of receiver.
I am a resident indian. My daughter is NRI and earns in Euro. She has a NRE account. Daughter had taken education loan. Since she started earning she asked me to clear the loan and I have cleared the loan. She has sent me Rs.5 Lacs just now. is it taxable? This is the money which I have paid back to the bank when I got the maturity monies from deposits. She has actually paid back what I paid back to her loans?
Hi Raju,
Gift from NRI relative is exempt from tax for both giver and receiver. The amount you received is tax free in your hands.
Make sure that the amount you received is backed up by gift deed
Hi hemant,
I wanted to get your specific views on the following 2 cases:
1. My husband who is a foreign national (OCI Cardholder) would like to make monthly transfers of €800 equivalent in INR into my a/c as gift or maintenance (*A. what is advisable btw the two formats for tax purposes?*). I’m currently a NRI although I’m based in India for a few more months while my visa is being processed (expected take 2-3 months).
*B. should he send the funds to my NRO or my NRE a/c?
*C. would those funds be taxable for me in India?
2. I would like to transfer INR20-30L into my mother’s a/c 3-5 times a year. She is an Indian resident.
*A. would this amount be taxable for her?
*B. could she transfer a portion of these funds into my indian a/c in future?
Appreciate your specific advice. Thanks much.
I have friend in France now sent me 17000 euros but my they are asking FCRA certificate is this right?
I am a Indian citizen highly salaried person with all taxes paid. I want to gift my Nri son 1 million dollars. What is the formality
Hi Harsh,
As your son is relative, both giver and receiver are exempt from tax in india but the maximum limit of transfer is $250000 in one financial year
I am an Indian. I want to transfer shares of a start uo company as a gift to My brother who is a US citizen but lives in india
when sn NRI is gifting a property of worth 4000000, what percentage of tax he needs to pay to indian government
Hi Vijay,
If NRI is gifting property to relative, then it is tax free for both giver and receiver.But if NRI is gifting property to non relative then upto Rs 50000 exempt above that taxable in the hands of receiver
What is the tax implications for the receiver in USA in case an NRI receives usd gift from Indian citizen(a relative) via a bank transfer and what is the limit?
Hi Matri,
When an NRI receives gift from a relative in india,then it will be tax free for both giver and receiver in india. The maximum limit is $250000 in one financial year
I live in the UK, I am not Indian, but have an Indian friend who lives in India. I have given this friend 320,000 rupees in installments. Does my friend need to declare this money for tax purposes?
Hi susanna,
Yes he has to pay gift tax in india as he is non-relative and amount of gift exceeds RS 50000
I have received gift in foreign currency….so is it taxable
Hi Shreya,
As per RBI rules, residents are permitted to hold foreign currency upto 2000$. If foreign currency is within limit and received from relative ,no tax but if such foreign currency received by non relative then upto RS 50000 exempt beyond that taxable in the hand of receiver.
My brother who is in US for past 5years wanting me to gift a sportsbike…. so is that cost me any duties for accepting as a gift??
Hi Vijay,
You and your brother are relative. If your NRI brother gifts you sportbike then there will be no gift tax. Both giver and receiver are exempt from tax
I have a non relative out of india and i want to gift a property that is mine, is it possible?
Hi Jagan,
Yes, you can gift a property to non-relative but the receiver have to pay gift tax in India if property value exceeds Rs 50000.
Can an Indian resident send money to his nri uncle living abroad
Hi Ram,
Yes, you can send money to NRI uncle. Your NRI uncle is non relative, the gift is exempt up to Rs 50000 above that is taxable in the hands of the receiver. Maximum limit of transfer is $ 250000 in one financial year.