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Gift to NRI by Resident Indian

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Divya Singhvi

Gift Income
Income Tax
Income Tax for NRI

The Income Tax Act defines a gift as any asset received without consideration or against inadequate consideration like money or money’s worth. It can be in the form of cash, movable property, or immovable property. In the below article, we will understand how giving or receiving these items as gift to NRI by resident Indian or vice-versa can bring in tax implications and who has to bear them.

Taxability on Gifts to NRI by Resident Indian

 Sr no Particulars Taxability
1. Money (cash, cheque, draft) If money > 50,000; whole amount taxable
2 Value of gifts received less than INR 50000 Not taxable
3 Property/money on the occasion of marriage Completely exempt irrespective of the value
4 Gifts from Specified Relatives Not taxable
5 Gifts from Other than Specified Relatives Not taxable if Value is < 50,000/-
6 Movable Property received as a gift. Taxable if Value > Rs 50,000/- &  received from other than Specified Relatives
7 Immovable Property (Land/House) received as a gift Taxable if Stamp Duty Value > Rs 50,000/- & received from other than Specified Relatives
8 Gifts in the form of shares and securities  The total value can’t exceed INR 50,000/- in one financial year
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Exemption of Gifts

Under the following situations, receipt of gifts shall be non-taxable in hands of recipient irrespective of monetary value:

Relative*: Given below is a list of people considered as relatives under the tax regulations:

A Gift to a Resident Indian by NRI

Another very important aspect while sending or receiving gifts is keeping a record of the same through gift deeds. Furthermore signing a gift deed and keeping them safe can help you to avoid major issues in the future.

FAQ

I am an NRI. If I gift INR 10 lakh to my daughter in India and if she invests it in a bank fixed deposit, will either of us be liable to pay income tax?

As per Section 56(2), any sum received from relatives is exempt from tax. So, if this amount is received as gift from a father, it will be exempt in her hand. Further, as per Section 64, income generated from this gifted amount will be clubbed in her income and she will be required to pay tax and file the return in India if her gross total income exceeds the minimum exemption limit of INR 2,50,000.

How much money can be legally given to a family member as a gift in India?

While gifts received by any person above INR 50,000 are taxable, there are special exemptions for gifts to some specific relatives like children and parents. However there is no limit on the amount that can be gifted.

Can resident gift shares to NRIs?

Gifts from Resident Indians to NRIs in the form of shares and securities of an Indian Company, the total value can’t exceed INR 50,000/- in one financial year. Further, the gift should follow the regulations of RBI

Got Questions? Ask Away!

  1. Hello @Rakesh_Sharma

    Inheritance will be considered as gift and gift received from relatives are not charged to tax.

    So If you give away your inheritance (received from father) to daughter (a lineal descendant ) it will be exempt from tax but your daughter’s children are not lineal descendant so that will be taxable in their hands.

    Hope this helps!

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