Are Gifts from NRIs to Indian Residents Taxable? Here’s What the Law Says
If you’re an NRI sending money or property as a gift to someone in India, you’re not alone , thousands of overseas Indians do this every month. But are such gifts tax-free or taxable?
According to the Income Tax Act (Section 56):
“Any monetary gift above ₹50,000 from a non-relative may be taxable in the recipient’s hands.”
Key Points for NRIs
Gifts to relatives (parents, spouse, siblings, children, grandparents) are fully exempt from tax.
Gifts above ₹50,000 to non-relatives (friends, acquaintances) are taxable in India for the recipient.
NRI gift of immovable property (like a flat or plot) is also taxable if market value exceeds ₹50,000 and the donee is not a relative.
Gifts from NRO/NRE accounts are allowed but must be through banking channels for audit traceability.
No tax abroad — but Indian reporting may be required for large remittances.
Example
If an NRI in Dubai gifts ₹2 lakh to a cousin in Mumbai, the recipient must declare it as “Income from Other Sources.”
However, the same amount to a parent or child is completely exempt.
Do you think India should raise the ₹50,000 exemption limit for NRI gifts given rising inflation?
