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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{ 198 comments… read them below or add one }

jin June 12, 2013 at 4:34 pm

had a few questions:
1. is there any tax associated with gifting a land from daughter(NRI) to dad(Indian Resident) on the Indian side?
2. On the US side, it looks like the person gifting the land has to pay taxes irrespective of daughter-father relation. Is that true, if so how does the calculation work?


Manshu June 14, 2013 at 2:54 am

1. No, there is no gift tax in this case.
2. Sorry, not aware of this answer.


Gopal June 13, 2013 at 11:05 am

Hi, I am an NRI but I regularly file Income Tax returns in India for my India Income. I want to gift INR25Lacs to my father who is a resident Indian and an income tax assessee. I had transferred the requisite amount to my NRE a/c in India. But somehow, I transferred INR10Lacs to my NRO account out of that remittance. Now, Can I gift INR15Lacs from NRE a/c and INR10Lacs from NRO a/c to my father so that it is tax free in his hands and in my hands also? What documents, if any, may be required by the income tax authorities in India for the assessment of my father’s or my own?


Manshu June 14, 2013 at 2:26 am

Gifts are tax free so you can give this to your father. I’m not sure about documentation, he may need to show it as a gift in his assessment and the bank statement may be enough but I don’t know this for sure.


Manikaran Singal June 17, 2013 at 5:57 pm

Yes Gopal, you can do this. gifts from Son to father is totally tax free in father’s hand. It doesn’t matter from which account the amount is getting transferred. For you it is already out of tax paid income, so you don’t have to pay any extra tax. You don’t have to do any documentation for this. If at all you want to do the same, than you can write a simple Gift deed saying that you are gifting this much amount out of natural love and affection to your father on plain piece of paper quoting yours and your father’s PAN number.


Lata June 19, 2013 at 1:38 pm

I am Indian citizen and staying and working in India. I wish to gift to my younger married sister. I am of 58 yrs, single and have no liability. How much maximum amount I can gift to my sister and how can I claim rebate in my income tax return ?


Manikaran Singal June 22, 2013 at 11:11 am

Lata, you can gift any amount without any limit. There’s no rebate available on gifting. Its just that for your sister, the gift received will not be taxed.


S.Vaidyanathan June 28, 2013 at 11:20 am

Dear Sir,

I have released a site of my father to my sister through a release deed registered with the local authorities. My sister inturn has given me a gift of Rs. 12 lacs. Is this taxable? Please let me also know what are the documentations required for this gift from my sister.



Manshu June 30, 2013 at 8:56 am

I am sorry, not familiar with rules on release deeds.


S.Vaidyanathan July 1, 2013 at 1:17 pm

This is a inherited property from my late father, which is shared by all the sons and daughters of my father. All of us have given in writing to my elder sister that we will relinquish our rights on the property (which is in the form of release deed). The site has now been transferred from my father to my sister. Inturn, my sister has given us 12 lakhs. My question is whether we can consider this 12 lakhs as gift since it does not attract any gift tax.


Anand July 10, 2013 at 1:51 am

I like to gift my father a house , which I have in my name. can i gift him. What is the procedure.


Manikaran Singal August 16, 2013 at 10:52 am

You have to draft a gift deed on a stamp paper, get it witnessed by 2 witnesses and register it. Registering a gift deed especially in case of immovable property is mandatory,failing which the transfer would be invalid. Also pls note that this transfer would be irrevocable. Once the property is gifted you will not be able to reverse the transaction and not even ask for any compensation.


Pooja July 11, 2013 at 3:58 pm

I received a gift from my parent company in the US 2 years back. Does the company I work for in India (wholly owned subsidiary of the parent company) have the right to collect Gift Tax now after my return to India?


Manikaran Singal August 16, 2013 at 11:05 am

Gift from your company. Great!! but pooja, your company doesn’t come in the definition of relative, so better talk to your company’s tax accountant. Depending on the type of gift if tax laws say so, then your tax calculation will automatically take into account that gift. As your employer will pay your tax and file your return as far as salary income is concerned, so don’t worry if that gift is taxable then your company will take care of it.


anil July 14, 2013 at 11:24 pm


My father in of Indian nationality, lives and has retired in India. I am a british citizen and have been in the UK for more than 10 year.s

He’s wishes to send me a million dollars, I understand that no tax is payable because he is my father. is there any issues on sending the money to UK?
Do you know efficient methods to send large amounts from india to the UK?




Manshu July 15, 2013 at 8:12 pm

Sorry I am not aware of a way to do this.


ravif July 23, 2013 at 12:11 pm

What documentation is required for IT authorities for gift from a relative? Is the fact that the amount comes from a relative sufficient.


Manikaran Singal August 16, 2013 at 11:10 am

If the amount is significant then better to draft a gift deed by mentioning the pan number of the giver and receiver and do mention that he’s giving gift due to natural love and affection.


Farooq July 26, 2013 at 12:16 pm


I had brought a gemstone in Dubai which turned out to be an antique / collectors item. Now still I am abroad and here a person wants to buy it. Will the remittances of this sale to my account in India taxable? Your immediate response will be highly appreciated. THANKS


Henna July 30, 2013 at 12:53 pm

As I understand gift from specific relatives is tax free for recipient. For donor also there is no issue. However if recipient is not a minor child, or spouse or son’s spouse then the interest/ money made on the gift is taxable from recipients income. Else interest/ money made on gift is taxable from donor income.

My question are: please consider gift higher than 50K.
1) I am married woman and my parents gave me cash exceeding 50k and I made 2FD for same in 2 banks. Bank has already deducted tax. I am showing interest as income from other sources. How should I show the tax that bank has already deducted?

Question 2) my father in law gave me money which I put in my ppf. I am showing ppf as savings under section 80C. Anything I need to be aware of?

Question 3) My parents gave me money to decrease liability of my home loan. Anything from tax angle here?

Question 4) my parents gave me money which is lying in my salary/savings account. Any tax implication here?

Please provide responses to me. Would be grateful. I am assuming in all above cases that money I initially received that is principal is not be shown as any income. If I m wrong please correct me and let me know which ITR form I need to fill.


RAJAT July 30, 2013 at 1:06 pm

Hi, My grandfather divided his entire immovable assets and distributed as per his will to his 3 sons. Can these sons gift their portion to their sons or daughters as per their will. If yes what kind of tax liability shall fall.Please advise . Regards


priti August 9, 2013 at 7:59 pm

my sister wants to give me Rs.5 lacs. she is working with LIC. how she can gift me
can you explain me.whether she has to do certain legal process or filing of document


paresh rege August 12, 2013 at 2:07 pm

we have a flat in mumbai which holds name of my mother and her brother . the property is duely registered in 1981. now the said property is going for redevelopment. my mother’s brother wants to gift the property to my mother. what would be the tax implications?


Rita August 20, 2013 at 2:53 pm

My Parents want to gift me Rs 10,00,000 towards part contribution of Purchasing a flat of about 1 crore. Would they have to pay any Gift tax? Would any additional tax be levied on me?


Manshu August 20, 2013 at 8:24 pm

No as long as tax has already been paid on this money – neither you nor them need to pay any tax again.


Bll August 25, 2013 at 1:20 pm

I live in delhi. I am working but expenses are more than earning as my husband is unemployed. Also i m planing to do some study/course.
My younger brother works in US frm one year and earns well. I have requested him to send me some money for my need and some for downpayment of a flat for me. Can u pls tell me any tax implications for both of us? Also how best way he can send me money? Bank transfer or western union??? Urgent pls


Naresh Chandra Jain August 27, 2013 at 12:42 pm

Dear sir,
Can my son NRI/POI donate shares of indian companies to his mother (indian citizon).


vikas mishra September 7, 2013 at 10:18 am

Hi, I am a NRI in USA. My brother in India bought an apartment on his and my father’s name last year. It was for 1 crore. I have been paying most of that on construction linked plan since last year and has payed almost half of it by now. I don’t want my brother and father to pay me back this amount. I have been paying this through my NRE bank account. The checks go directly to builder’s account. Any tax implications.? Is it possible that I can just say that I wanted to help my brother and father in this way and don’t want the money back from them? Can I avoid showing it like gift or lending.


Anil jain September 17, 2013 at 1:17 pm

Dear Sir ,
I have gift my partnership in my family owned business to my wife . Second partner in the firm is my son and there is no monetary transaction included but when i gone to register it at registrar office he said you have to 6% of stamp duty on it . As you cannot gift your partnership stake to anyone. Please advise .

Warm regards
Anil Jain


ANUPAMA GARG September 18, 2013 at 8:55 am

my mother in law gifted a property to me .I reconstructed and sale it what is tax position on it


akila September 20, 2013 at 12:26 pm

Hi.. Am selling my house in Chennai and am due to receive about 1.6 cr for it.. I don’t own any other houses and am not employed anywhere.. Of the money received i wanna purchase two flats each about 50l each in my name,which i was told is tax exempted.. Apart from this i would like to gift 20 l each to my 3 siblings. Could you please tell me how this can be done? And also if there is any tax that i d incur? Also if not as Money can i gift them that amount in the way of a down payment for aprtments in their names which they could later pay off through housing loans..? Thanks in advance..


Suraj Gaikwad November 13, 2013 at 8:09 pm

Hi. The flat is registered in the name of my mother and i have 1 sister who is married. Now i want to transfer the flat ownership to my name by the way of gift transfer and stamp duty is around Rs.180000/-. I want to know that the stamp duty to be paid by me will be considered for tax exemption or so? Please advise.



Ganesh Jayaraman November 27, 2013 at 10:35 am

Hi, My mother in law is going to dispose of a house property registered in her late husband’s name and is going to give a third of the proceeds to my wife( apprx Rs.1300000) and another third to her son(my Brother in law). What is the tax implication? Does my wife need to pay tax on her share (she is a housewife)?


bindu January 8, 2014 at 3:06 pm

need to make a gift deed…my sister has gifted me a car…so need
to make a gif deed for the same..pls help


bindu January 9, 2014 at 3:11 pm moms sister has transfered an amount to my bank account …she is a tax payee n residing ion India…will i have to make a gift deed or a letter from her and will I also be paying tax for the same…also whats the maximum one can transfer

thank un


Manshu January 9, 2014 at 6:06 pm

Since she is a relative it isn’t taxable, and there is no upper limit either.


GAURAV GAGNEJA January 28, 2014 at 10:20 pm



Rajesh Kumar Khurana February 15, 2014 at 1:23 pm

Please let me know that My father want to gift me a newly constructed floor of a house in Delhi of 150 sq yards, if I wish to get it registered in my name how much registration tax/duty I have to pay for it.
thanks & regards


sachdev March 4, 2014 at 11:48 am

my wifes cousin that is her buas son that means my wifes fathers sisters son wants to give my wife a gift cheque of Rs.500000 would there be any tax element attached to it pls advice urgently thank you.


Ronfire777 March 21, 2014 at 4:03 am

When my wife and I were married 12 years ago, her mother gifted my wife a sum of money, which we placed in joint TD’s in India. The accounts are NRO and have remained with the same bank since then.

With the recent change in rules regarding transfer to NRE/repatriation, I would like to find out whether a gift received shortly after marriage meets the criteria for transfer to NRE or repatriation overseas (within the financial year limits allowed)?



Dominic Deepan April 7, 2014 at 12:47 pm


my friends from u.s wants to buy a land in india, chennai. and amount is 6cr when converted to indian ruppees. i am aware of gift tax.

i just want to know, what are the documents i need? i askd with my hdfc banker. bt am nt satisfied with thier answer.

if my send me email that he is transacting money from u.s as gift to me, will that be taken as a proof.


Nirmalya Guha April 8, 2014 at 11:26 pm

Hello Sir

I learnt that the amount of money that I gift to my parents is exempted from income tax on my side i.e I can claim tax return on the same amount.
If this is applicable, I would like to know the procedure of such gifting and what proof I need to provide to Tax authorities to claim tax benefit.



Arijit May 2, 2014 at 3:10 pm


If you get the answer then please let me know as well.



Manikaran Singal May 29, 2014 at 12:31 pm

Nirmalya, what you gift to your parents is out of your tax paid income i.e you have already paid or will pay tax on that. There’s no deduction as such available on that gift.
This is just that the amount that you gift to your parents is non taxable in their hands. also the interest they earn by investing that amount will not be clubbed in your income which otherwise would have if the gift was made to minor child or your spouse.


Arijit May 29, 2014 at 12:43 pm


What If I want that my parent should pay the tax on the gift that I give them is it possible?


Jeeva April 10, 2014 at 3:03 pm

I am working in Netherlands, and I am employed here for past 2 years.
And I am keep transferring my money to my Indian bank account.
Could you tell me, what is the maximum amount I can transfer as tax free per year?
Do I need to file tax return in India every year?



naveen April 15, 2014 at 4:17 pm


I got rs 10 lack from my father in my bank account. Is this my income? We have to make any paper for this ammount.
Pls reply


Manikaran Singal April 25, 2014 at 6:36 pm

This reciept has to have some reason to it. Is it a gift or a loan? If it is a gift you have to prepare a gift deed which can be on plain paper and if this is a loan, then also its better to get one agreement signed between both of you. Consult your tax consultant for these documents.


sanjay April 20, 2014 at 6:19 pm

i have learnt that i can gift an amount to my very senior citizen dad for opening FD in his nameand avoid clubbing of income from the interest generated on from that FD .

kindly tell me the procedure to do that to satisfy the IT authorities.



Manikaran Singal April 25, 2014 at 6:34 pm

Sanjay, you are right. You can gift any amount to your dad and the interest generated out of that amount will not be added back in your Income.
You just have to write on a plain paper that you are gifting this amount to your dad out of natural love and affection by quoting his and yours Pan number. Sign it and also get it signed as acceptence of amount from your dad. This letter is sufficient to satisfy IT authorities.
Also do remember to pay this amount by cheque.


Ajay Maurya April 21, 2014 at 8:34 pm

Dear all,

what is gift tax rate in India

From Ajay


Manikaran Singal May 29, 2014 at 12:35 pm

There no specific tax rates on gifts. Its just that if the gift comes under taxable category then whatever you have gifted will be added in reciever total income and will be taxed as per the income tax slabs he falls in.


Arijit May 2, 2014 at 3:07 pm


I have a query exactly related to this, suppose I want to gift some amount to my mother/father, lets say 1 lacs for easy calculation.

Ques 1:
Whether bother will be exempted from paying tax on that (if both lies in any tax slab ie 10/20/30 %), I think not but still want to confirm.

Ques 2:
Who will have to pay the tax then if Ques 1 is not applicable?


Manikaran Singal May 29, 2014 at 12:40 pm

Whatever gift son gives to his parents are tax free in the hands of parents which ever income tax slab rate they fall in.

Arijit, you are gifting this amount from your income on which you are already paying taxes. so the gift is out of tax paid or payable income of you


Arijit May 29, 2014 at 12:44 pm

What If I want that my parent should pay the tax on whatever amount I gift to them instead of paying tax on my side, is it possible?


babulal jain May 6, 2014 at 8:01 am

gift from me to my nephew’s wife Rs. 500000=00 .

is it taxable in her account ?


Manikaran Singal May 29, 2014 at 12:46 pm

Mr babulal,
the gifts given to following relations are tax free in their hands
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.

your nephew’s wife doesn’t come under this list. So the amount that you want to gift her will be taxable in her hands.


Ajay c May 22, 2014 at 11:46 am

My father in India has passed away and my mum wants to sell the family home and divide the money amongst her children.
I live overseas and am an OCI. Can I take the money out of India without paying tax in India?
If so, how do I go about proving this to the Indian tax department?



Jitendra P.S.Solanki July 10, 2014 at 5:06 pm


Much depends on how the money is received. In current situation the selling of house will incur capital gains and so it will be liable to capital gains tax on the hands of the owner. Was there any Will of your father. If not then you are equal share holder in the property and so liable to pay income tax on your share. Else if the house was willed to your mother and then she is distributing then the the entire tax liability will rest on her.


Arijit May 29, 2014 at 12:48 pm

What If I want that my parent should pay the tax on whatever amount I gift to them instead of paying tax on my side, is it possible?


Jitendra P.S.Solanki July 10, 2014 at 5:10 pm


You can gift only after paying the required tax since the income is earned by you and so you are the tax payer. In hands of your parent it will be tax free.


patil, n .b . June 17, 2014 at 4:34 pm

I am a senior citizen and have shares purchased about two decades back out of my tax paid income. out of the above, i want to gift some shares worth about rs. 30 -35 lakhs to my married daughter who has her own income and pays tax. please advise me as to:
(a ) whether she has to pay gift tax for this gift,
(b ) if yes, can the gift tax liabelity be obviated by making her my nominee in the demat account and transferring the shares to her through my will so that she will get the shares after my death.


Jitendra P.S.Solanki July 10, 2014 at 5:17 pm

patil n.b.

a) She will not be paying any tax as daughter is in the list of relatives for whom the gift tax is exempted.
b) In shares lying in Demat account the nominee is the demat account is the final heir. As per Supreme Court Ruling 2012 the companies act overrules the Will according to which the nominee in the demat account is the final legal heir of the shares. So the transfer of shares will not happen through a Will but as per nominations in demat account. You can choose this option if you want to bequeth shares after your death.


MIHIR BISWAS June 18, 2014 at 12:27 pm

I Want to gift my minor daughter rs45000/yr and want to continue the same for next few yrs .Is that possible?If yes what’s the process of gifting?


Jitendra P.S.Solanki July 10, 2014 at 5:41 pm


In case of minor any income earned on the gifted amount is clubbed with income of the donor . So if you are going to invest it the income earned will not be treated as your minor son income but of yours.
For better results register a gift deed even if it is not mandatory. You can mention how and what amount you will be gifting to your sons. But remember the clubbing rule in case of minors.


Sharan June 27, 2014 at 12:16 pm

Hello Aashish, my question is regarding mode of transferring money as a gift. I want to transfer a few lakh rupees to my father’s account. If I use net banking (which is simpler than transfer by cheque), will I need to prepare a gift deed, etc. as proof of the gift? I am looking for a simple way to transfer the funds quickly and safely such that it can easily be shown to be a gift. Thanks.


Jitendra P.S.Solanki July 10, 2014 at 6:06 pm


For movable properties like jewellery or cash registration of gift deed is not mandatory. However apart from the transfer a gift deed will do good ob backing the gifted asset.So prepare a gift deed along with transferring the money.


mihir modi June 27, 2014 at 4:54 pm

A gift of Rs. 3 lacs in cash was given by husband to his spouse in F.Y.2013-14 but gift deed for the same was not executed at that time. whether he can execute the deed for the same in F.Y. 2014-15?
what are the validity of such deed?


Ramesh July 1, 2014 at 2:16 pm

Hi, I have gifted a house to my sister and got the dift deed registered. After 3 weeks of this gift deed is executed, my sister gave me Rs 31 lakhs as a gift. Will it lead to any tax complications or will it be considered as ‘avoiding the registration duty’, followed by ‘capital Gain Tax”?

Please help


Jitendra P.S.Solanki July 10, 2014 at 6:37 pm


If proper tax provisions are followed then there should not be any issue. However the onus lies on you to prove it to the taxman that the transaction is not done to avoid any taxation. Registration of gift deed in movable properties is not mandatory but capital gains tax has to be paid by the assesse as per the income tax provisions, if it arises.


k d shah July 5, 2014 at 10:01 am

Ihave some more than year old bonus shares,which

iwant to gift to my wife.For selling for i tax purpose what will be her date and price of purchase. Thanks K D Shah


Jitendra P.S.Solanki July 10, 2014 at 7:02 pm

KD shah,

In my view, in the case of gifted property, the cost of acquisition is the cost to the original holder i.e. you (or FMV as on 1.4.81 if the date of purchase is earlier). However for calculating indexation benefit the date of the gift should be taken as date of acquisition.
You can get it clarified from a tax expert.


satpal mittal July 6, 2014 at 11:57 am

i am 50 years and want to gift my son (20 years and a student with annual income of Rs 2 lacs) a sum of rs. 10 lacs. what about tax implications?


Jitendra P.S.Solanki July 10, 2014 at 7:05 pm


Your son will not have any tax implication on the gifted amount.


satpal mittal July 10, 2014 at 7:18 pm

Thanx Mr. Solanki. But what about any tax etc. at my end? Also shall my son have to pay any tax if he invests this amount in a debt fund?


Jitendra P.S.Solanki July 11, 2014 at 10:32 am


If this is your income then you are the tax payer and so the tax liability is on you. So you will be gifting this money after paying the required tax. Once the money is gifted to your son then any income earned on it will be treated as his income and he will be liable to pay income tax.


Anup July 12, 2014 at 11:48 pm

I think this information is incorrect.

Under the Liberalised Remittance Scheme (LRS) established by RBI, gifts from Indian Residents TO NRI close relatives are limited by a certain amount (whereas your article says that there is no limit on the amount of gifts)

Please correct me if I am wrong. As per my understanding, my Indian resident father can only gift me, NRI Son, the amount established in Liberalised Remittance Scheme (LRS) . This is currently set at USD 125,000 per year and changes frequently.


Jitendra P.S.Solanki July 14, 2014 at 8:30 pm


Yes that’s right. Indian Resident can transfer gift in cash to NRI relatives upto the specified limit set by RBI in one financial year. This in my view means resident can gift more cash money to NRIs close relatives but will have to do it in the next financial year.


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