Gifts
Taxation of Gifts for NRIs – Guide by Classic Partner
Expert Chartered Accountants for NRI Gift Tax & FEMA Compliance
At Classic Partner, we provide expert guidance on the taxability of gifts under Indian Income Tax Law, especially for Non-Resident Indians (NRIs) and Resident but Not Ordinarily Resident (RNOR) individuals.
Gifts are closely scrutinized by tax authorities, and NRIs must be careful about when money, property, or assets received without adequate consideration may become taxable under the Income Tax Act, 1961.
1. What is Taxable as a Gift for NRIs?
| Type of Gift | Threshold Limit | Amount Taxable |
|---|---|---|
| Cash / Money | > ₹50,000 (aggregate in FY) | Entire amount |
| Immovable Property (no consideration) | Stamp Duty Value > ₹50,000 | Entire SDV |
| Immovable Property (inadequate consideration) | Difference > ₹50,000 or 10% of value | SDV – Consideration Paid |
| Movable Property (shares, jewellery, etc. – no consideration) | FMV > ₹50,000 | Entire FMV |
| Movable Property (inadequate consideration) | FMV exceeds by > ₹50,000 | FMV – Consideration Paid |
2. What Counts as “Movable Property”?
Taxability applies to:
Shares & Securities
Jewellery & Bullion
Paintings, Sculptures, Artwork
Archaeological Collections
Valuation rules:
Quoted shares → stock exchange value
Unquoted shares → as per Rule 11UA
Other assets → fair market value
3. Tax-Free Gifts – Exemptions for NRIs
No tax if gifts are received:
From a Relative (spouse, siblings, parents’ siblings, lineal ascendants/descendants, their spouses)
On the occasion of marriage
Through will or inheritance
From local authorities
From registered charitable/educational/medical institutions
For COVID-19 relief (medical or death cases) (subject to conditions)
4. Gift Received in Foreign Bank Account – Taxable?
Yes – gifts may still be taxable in India if:
Sent by a Resident Indian to an NRI/RNOR,
Value exceeds ₹50,000 and not exempt,
Credited to a foreign account (after 5 July 2019 for NRIs, 1 April 2023 for RNORs).
Such gifts are deemed to accrue in India → taxable here.
5. Tax Rate on Gifts for NRIs
Taxable gifts = taxed as Income from Other Sources at applicable slab rates.
For NRIs, this usually means the highest slab.
Resident donor must deduct TDS @30% on taxable gifts given to an NRI.
6. Real Scenarios Where NRI Gift Tax Applies
NRI receives ₹1 lakh in NRE/NRO account from a friend in India.
Resident transfers ₹2 lakhs to an NRI’s foreign account, not exempt.
NRI buys property or unlisted shares at undervalued price vs FMV.
In all cases → Gift Tax liability may arise.
How Classic Partner Helps NRIs with Gift Tax
Our NRI tax specialists assist with:
Checking whether a gift is taxable or exempt
Drafting gift deeds and documentation
Ensuring TDS compliance by donors
Filing Form 15CA/15CB where required
Including gifts correctly in your ITR
Advisory on foreign remittances & FEMA rules
Key Tips for NRIs on Gifts
- Keep gift deeds & proof for all major receipts.
- Get proper valuation reports for property/assets.
- Always check “relative” definition before assuming exemption.
- Ensure donor deducts TDS when required.
- File your ITR in India to report and claim refund, if excess tax deducted.
Need Help with NRI Gift Tax Compliance?
Connect with Classic Partner – your trusted Chartered Accountants for NRI taxation, gift tax, and FEMA compliance in India.
