Income Tax on Gifts from NRIs and Relatives in India

by Guest Blogger on November 21, 2012

in Tax

This article is written by Aashish Ramchand, a Chartered Accountant by profession. Aashish is the co-founder of He also has completed his CFA Level I (American) and is very passionate about writing articles on taxes and tax advisory. He can be reached at

Generally, gifts are not regarded as Income chargeable to tax. However by virtue of Section 56(2) any sum of money exceeding Rs. 50000 received without consideration by an individual or an HUF from any person is chargeable to tax as income under other sources subject to exclusions as below:

  1. Receipts on occasion of marriage of the individual
  2. Receipts under a will or inheritance
  3. Receipts received from a relative.

Since 1/10/2009, Section 56(2) has been amended and the scope of gifts and will include even immovable properties or any other property besides sums of money under its ambit.

Gifts that are not taxable at all are those that are received from relatives. Relatives are defined by the following relationships of the individual:

  1. Parents
  2. Parents siblings and their spouse
  3. Siblings
  4. Spouse of siblings
  5. Daughter and son
  6. Spouse of daughter and son
  7. Spouse
  8. Spouse’s parents
  9. Spouse’s siblings and their respective spouse.

Even NRIs are covered as long as they fall in the category of relatives. Therefore an individual Indian resident can receive a tax free gift from an NRI as long as he/she is that individuals relative. Any amount can be received as a gift from a relative. Also the purpose for which the gift is received from a relative is inconsequential as it is completely tax free. Thus a gift received can be used for any purpose ranging from purchasing shares to buying property to even simply keeping it with the bank.

Note on gifting on immovable properties

There is a valuation aspect involved in gifting of immovable properties:-

  1. If the property is gifted without any consideration then if the stamp duty value exceeds Rs. 50000/-, stamp duty value will be taken
  2. If the property is gifted for a consideration, then the actual value of the property will be taken

In case of other properties:

  1. If gifted without consideration and fair market value exceeds 50000, then the fair market value will be taken as the final value
  2. If gifted for a consideration and the FMV less consideration is greater than 50000, then the FMV less consideration amount will be taken as the value of the gift.

As mentioned earlier NRIs can also give gifts to resident Indians. Therefore, It is important to understand the meaning of an NRI as per the IT act.

An individual will be treated as a non resident in India in any previous year if he fulfils any of the following two conditions:

  1. he/she is NOT in India in that year for period or periods amounting in all to 182 days or more, or
  2. Having within the four years preceding that year NOT been in India for a period or periods amounting in all to 365 days or more, and has NOT been in India for 60 days or more in that year.
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{ 332 comments… read them below or add one }

ASHISH CHOUDHARY December 11, 2014 at 5:50 pm

Dear Sir,
what is the point of taxation in the hands of donor in case of cash gift given to a freind in his marriage of whatsoever amount, how will the donor treats the gift in his books in case he is an individual and has no business income.


Jitendra P.S.Solanki December 14, 2014 at 9:04 am


Donor can treat the amount as gift in his books as there is no tax liability on the donor for the gift. This is also due to the fact that whatever gift you give to anyone is after paying your personal income tax. Its the donee i.e. person who is receiving the gift who has to pay the tax if its above the threshold limit and from a non-relative.


Shailesh Dubey December 13, 2014 at 2:41 pm

What will be the capital gain implications if we sold the gifted flat from my brother who had purchased land and construct a building and give me a flat as gift?


Jitendra P.S.Solanki February 28, 2015 at 6:32 am


You will be liable for long term or short term capital gains taxation based on holding period of the flat only when you sell the flat. There is no tax liability on gifting the flat. But stamp duty will be payable since this can be done only with a registered gift deed..


Abhishek December 16, 2014 at 2:59 am

Can my masi daughter give me monetary gift.


Jitendra P.S.Solanki February 28, 2015 at 6:33 am


Yes but that won’t be tax exempted in your hand.


meera December 18, 2014 at 2:45 pm

My wife is housewife. I purchased a property in joint name with my wife(House wife). No money is contributed by her. I sell the property after three years and paid capital gains tax on whole sales proceeds recd both by me and my wife. The sales proceeds recd by me is given by me to my wife as interest free loan.
Now my wife purchases the property from the loan given by me and out of the sales proceeds recd by her from the first property in her name.
She sells the property and earns long term capital gain.
In whose hand is the capital gains taxable–In wife hands or husband


Jitendra P.S.Solanki February 28, 2015 at 6:39 am


In case of housewife any income derived form a gift received by her husband is clubbed with the husband income. Although you have given a loan to your wife but she wont have any income of her own to repay you back so that transaction can be questioned by the IT Officer.

Most likely the tax liability will fall in the hands of the husband since wife do not have any income of her own and tax cannot be avoided by such transactions. You can take view of any good tax expert.


Sunil nayak December 24, 2014 at 9:09 am

Dear Sir,

this is sunil, i am 45 years old and one lady from England made me next kin of her since nobody is to inherit her. She wants to transfer some amount through bank deposited. If i get money then is it taxable? To avoid tax what are the measurements can be taken. What documents to be shown to the bank or RBI. Please help me out. What are the best options?

Thanks a lot



Jitendra P.S.Solanki February 28, 2015 at 6:43 am


If there is no blood relation between you then whatever amount she gives you (beyond R 50000) will be taxable in your hand. You cannot avoid the tax. You also need to check the inheritance where you will be paying tax as per England inheritance laws.


R B SHANKAR RAO . December 24, 2014 at 10:11 am

Dear sir ,
I want to give gift to my son who is employed and got married , one 3bhk flat in the apartment which was developed by my builder in my self acquired land ,under development cum building agreement .It is known that gift deed shall be registered for the same as it being immovable property .
I need to have an advice from you that such gift is taxable under gift tax act .


Jitendra P.S.Solanki February 28, 2015 at 6:47 am

R B Shankar Rao,

Gift received by parents will be tax exempted under the Gift Tax Provision and so you or your son won’t be incurring any tax liability on the gifted value. Yes stamp duty will be payable as it will happen through a registered gift deed.


Jitendra P.S.Solanki February 28, 2015 at 6:56 am

R B Shankar Rao,

Gift received by children from their parents is also tax exempted.


Rajani December 30, 2014 at 12:33 am

Hi ,

Thank you for covering this interesting topic.
These are the few doubts I have,
1. Is an NRI allowed to transfer money to parents.
2. And if the parents are allowed to buy agricultural land with that money

3. The NRI later inherits the agricultural land from the parents, through a gift deed or after the demise of the parent.

4. Isnt this method allowing all the NRI ‘s to invest and buy agricultural land through this route.

Please explain.




Jitendra P.S.Solanki February 28, 2015 at 8:38 am


The transaction may not be so simple as it looks. There are rules which get applicable from RBI. In my view take assistance of a tax expert specializing in NRI taxation.


santosh January 3, 2015 at 5:37 pm

I Can purchase or not gifted property. Father property given to daughter is gift as per income tax but I not a family member not relative give the reason.


shalini January 9, 2015 at 6:41 pm

My mother wants to gift me a property.kindly let me know the process.


Jitendra P.S.Solanki February 28, 2015 at 8:43 am


For gifting immovable property a registered gift deed is necessary. The gift deed will be registered in sub-registrar office and stamp duty will be payable as per state laws.


sunay January 10, 2015 at 8:41 am

can a customer buy a plot from developer which is gained by a developer as gifted land?


sri January 11, 2015 at 4:11 pm


If I receive ~5lakhs INR from my parents, do me and my parents have to pay gift tax for the amount.
If yes, how do we declare this as gift from parents and next steps for both the parties.

Please advice.



manoj January 20, 2015 at 11:31 pm

sir i won bike in lucky draw its amount 60000 its cut 30% tds on this.tell its tax can be return and how


BS Thakur January 22, 2015 at 12:36 pm

Dear Sir,
My NRI son gifted me Rs.40 lakh in Nov. 2014 from his NRE accounts through cheques in my favour. Can I buy a residential flat with this amount in my name? He has signed a gift deed in my favour which is witnessed by his two colleagues and signed by me at his redience abroad in token of having aceepted the gift and he gave me two cheques which I have not yet deposited in my bank account apprehending some tax liabilities and its utilization for purchase of a flat. These cheques are valid for three months from the date of issue. Is the gift deed given by son in Nov.2014still valid, if I now deposit those cheques bearing date of November in my bank account and use the amount for purchase of a flat? Or Do I need to have fresh gift deed? Now we can not sign gift deed together as my son is now in foreign country and I am in India.
Your reply/guidance is awaited.
Thanks & Regards.


Brenda February 20, 2015 at 2:10 pm

My husband wants to gift a flat on my name what is the procedure to transfer the flat on my name and do i have to pay or just make a gift deed agreement. what is the procedure if i am a housewife or working.


Utkarsh February 21, 2015 at 7:46 pm

Can my Father’s Brother’s Children give gifts to me


Vipin February 24, 2015 at 3:43 pm

One of my friends from US has gifted me $5000.
What will be the tax implications on the same.
Kindly advice.


G.S.Prasad February 27, 2015 at 11:06 am

How much amount that i,can accept as a gifts from non relatives individually from each person each can give me less than Rs 20000.and around 100 friends are there to me. Shall i accept gifts around Rs 20 lacks on the occasion of commencement of my business. kindly guide me.Weather any tax implications are there and these are come under exempted gifts or not ?is there any income tax has to be paid on those gifts kindly guide me.

thanking you sir


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