Gift Tax Laws For NRIs In India

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If you’re a Non-Resident Indian (NRI) gifting assets or money to your family members in India, it’s important to be aware of gift tax in India and it’s regulations. This guide explains the rules and regulations surrounding gift taxation in India for NRIs, from cash transfers to property and other movable assets.

What is a Gift as per the Income Tax Act in India

When considering tax exemptions on gifts for NRI, it’s important to be aware of what categories and types of gifts are specifically exempt as per Income Tax Act in India. Here is a list of gifts exempt from tax:

Gift Tax Exemptions for Specific Occasions

These occasions are exempt under Indian gift income tax exemption provisions and apply regardless of the gift amount. 

Gifts Exempt from Tax When Received from Institutions

Note: To claim a charitable gifts tax deduction or charity gifts tax deduction, ensure the organization is registered and donations are made through proper channels as specified by the Income Tax Act. 

If you’re an NRI planning to gift to your loved ones in India, it’s important to factor the transfer laws set by India. The income tax act in India defines gift in the form of: 

• Monetary: Cash, cheque, or electronic transfer 

• Movable property: Shares, jewellery, artwork, etc. 

• Immovable property: Land, residential apartment, or both.  

Occasion-Based Exemptions: 

• Marriage: Gifts received on the occasion of marriage are fully exempt. 

• Inheritance/Will: Gifts received through inheritance or under a will are exempt. 

• Contemplation of Death: Money received in anticipation of a person's death is exempt. 

Other Exemptions: Gifts from local authorities, charitable or religious trusts, universities, hospitals, or registered charitable organizations are exempt. 

Understanding NRI Gift Taxation in India

Most of us cherish giving and receiving gifts, but this can have tax implications for NRIs. The Income Tax Department sets guidelines to determine when gift tax in India is applicable, whether the recipient is a relative, friend, or acquaintance.  

• General Gift Tax Exemption: Gifts received from non-relatives are exempt from income tax for up to INR 50,000. If the total amount exceeds this limit, the full amount is taxable under ‘’income from other sources. 

• Gift from Relatives: Gifts received from relatives are fully exempt from income tax, regardless of the amount. According to the Income Tax Bill of 2025 the relatives listed in gift tax exemptions are gifts from both maternal and paternal relatives, as well as spouse’s parents and grandparents. This also includes siblings, children, grandchildren and similar close relations. 

FEMA Regulations and Rules for NRI

NRIs must follow specific FEMA guidelines when receiving gifts from India or abroad:

• NRIs can receive gifts of movable and immovable property, but the receipt and remittance are regulated by FEMA (Foreign Exchange Management Act).
• Under the Liberalised Remittance Scheme (LRS), gifts to NRIs are capped at USD 250,000 per financial year.
• Monetary gifts can be credited to the NRO account only, which is relevant when considering tax on gift money in India.
• Sale proceeds of immovable property can be remitted up to USD 1 million per year, higher amounts need RBI approval. This may be subject to gift tax on property in India.
• Gifts of financial securities cannot exceed 5% of the company’s paid-up capital.
• Cash gifts above INR 2 lakh may attract penalties under Indian law.
• NRIs are taxed in India on gifts received if the total value from non-relatives exceeds INR 50,000 in a year, unless exempted under special categories like marriage, inheritance, or will. This forms a key aspect of gift taxation in India.

Gifting Between NRI and Resident

Gifts From an NRI to a Resident Indian

• Gifts from NRIs to Resident Indian relatives are exempt from taxes.
• Gifts from NRIs to Resident Indian friends or acquaintances are tax-exempt if their value does not exceed INR 50,000.
• Income from gifts by NRIs to friendsor acquaintances in India is taxable if the value exceeds INR 50,000. The amount is added to the recipient's total taxable income and taxed according to their income tax bracket. This forms a key consideration in gift taxation in India.

Gifts from a Resident Indian to an NRI

• Is not subject to gift tax in India.
• Gifts to friends or acquaintances (recipients) are exempt from tax if their value does not exceed INR 50,000, this falls under the exemption limit for gift tax in India.
• Gifts to friends or acquaintances are taxable if their value exceeds INR 50,000. Added to the recipient's total taxable income, the amount is taxed depending on their income tax bracket. The annual limit for these kinds of gifts is USD 250,000, under the Liberalised Remittance Scheme.

Gift Tax on Property in India for NRI

NRIs receiving property as a gift in India must comply with FEMA and tax laws. Gifts from relatives or on marriage are fully tax-exempt. Whereas gifts from non-relatives exceeding INR 50,000 in stamp duty value are taxable. Sale proceeds can be remitted abroad up to USD 1 million annually with RBI approval. Proper documentation like a registered gift deed is essential.

Read More About: TDS on Sale of Property by NRI in India

Tax Saving Through Gifts

Gifting to relatives or on marriage is tax-free in India and can help save taxes. Keeping gifts from non-relatives under ₹50,000 avoids tax on gift money in India. NRIs should avoid cash gifts above ₹2 lakh to prevent penalties. Strategic gifting aids in tax planning and estate management while ensuring compliance with gift taxation in India.

Also Read: Benefits of NRE Account

How to Calculate the Taxable Value of a Gift

If you are sending a gift and want to know if it is applicable for taxation, consider this simple calculation table for types of gifts and its value:

Understanding the NRI Gift Deed

NRIs have to formally document their gifts through a gift deed under Section 17 of the Registration Act, 1908. Two necessary parties are included in this legal document: the beneficiary and the donor (the gift giver). Both sides must sign all pages of the gift deed, executed on a stamp paper, to legitimize the transaction. This ensures the transfer is legal and transparent, especially when it involves assets or property that may be subject to gift tax in India.

Conclusion

The income that is received in India is generally subjected to taxation, with rare exceptions. Except for gifts relating to marriage or inheritance, taxes may be imposed on income received from an NRI. Before sending or receiving gifts from non-resident individuals, it is crucial to review laws for gift taxation in India .

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*Disclaimer: This article is published for informational purposes only. It should not be construed that the offering is available from DBS Bank India Limited or in partnership with any of its channel partners. The purpose of this blog is to provide information, not advice. It is recommended to seek professional advice before making any investment decisions. The bank assumes no responsibility for any tax losses or other losses incurred by individuals acting on the information provided above.

The purpose of this blog is not to provide advice but to provide information. Sound professional advice should be taken before making any investment decisions. The bank will not be responsible for any tax loss/other loss suffered by a person acting on the above.