Gift Tax Rules for NRIs: Cash, Property and Gift Deeds Explained

General information, not tax or legal advice. Rules as of October 2026.

India abolished its Gift Tax Act in 1998, but gifts were never made tax-free. The charge simply moved into income tax, in the hands of the recipient. Since 1 April 2026 it sits in Section 92 of the Income-tax Act, 2025 (earlier Section 56(2)(x) of the 1961 Act); the rules themselves carried over unchanged. For NRIs, two other layers sit on top: FEMA, which decides whether a gift may cross the border at all, and state stamp laws, which decide what it costs to put a property gift on paper. This guide takes each in turn.

Who counts as a relative for gift tax?

Everything turns on this list. A gift from any of these people is exempt in your hands, with no upper limit:

• Your spouse.
• Your brother or sister, including half and step siblings.
• Your spouse's brother or sister.
• The brother or sister of either of your parents.
• Any lineal ascendant or descendant of yours: parents, grandparents, children, grandchildren.
• Any lineal ascendant or descendant of your spouse.
• The spouse of any of the people above, so sons-in-law, daughters-in-law and a sibling's spouse are included.

Cousins, nephews and nieces, your parents' cousins and family friends are not relatives for this purpose, however close you are. Rs 3 lakh to a sibling is exempt; the same Rs 3 lakh to a cousin is fully taxable income in the cousin's hands.

›Other gifts that are always exempt

• Gifts received on the occasion of your own marriage, from anyone and of any amount. The exemption belongs to the bride or groom, and the gift should be made around the wedding, not loosely in that year.
• Property received under a will or by inheritance.
• Gifts made in contemplation of the donor's death.
• Gifts from a local authority, or from registered charitable trusts, institutions and specified funds.

The Rs 50,000 rule for gifts from non-relatives

For gifts from non-relatives, Rs 50,000 is a cliff, not a deduction. It applies to the total of all such gifts in a financial year. Stay at or under it and nothing is taxable; go over it and the whole amount is taxed, not just the excess.

The same threshold applies to gifts in kind, with a different measure of value:

Splitting a gift through several intermediaries does not escape the rule. Routing Rs 3 lakh through three people at Rs 1 lakh each will be treated as what it is, and it adds a credibility problem to a tax problem.

Is a gift from an NRI to a resident taxed?

Only if the resident recipient is not your relative and the total crosses Rs 50,000. Money an NRI sends to parents, a spouse, siblings or children in India is exempt in their hands, however large, and the NRI donor owes nothing in India. The same Rs 5 lakh sent to a friend or cousin is taxable in the recipient's hands at their slab rate.

On the FEMA side, money coming into India is unrestricted. You can remit from abroad, or transfer from your NRE or NRO account, to a resident's account with no rupee cap. Use banking channels throughout. Receiving Rs 2 lakh or more in cash from one person in a day or for one occasion can draw a penalty equal to the amount (Section 269ST in the old Act), and how that applies to family gifts is debated, so it is simplest not to test it.

Is a gift from India to an NRI taxed?

The income-tax test is the same: exempt from a relative, taxable above Rs 50,000 from anyone else. Since July 2019, a gift of money or property from a resident to a non-resident is treated as income arising in India (earlier Section 9(1)(viii)), so an NRI cannot argue that a taxable gift received abroad falls outside Indian tax. In some cases the tax treaty with your country of residence may reduce this; the treaty's other income article is where to look.

On the FEMA side, a resident sending money abroad uses the Liberalised Remittance Scheme, which allows up to USD 250,000 per person per financial year across all purposes, gifts included. A resident can also make a rupee gift to an NRI relative by crediting the relative's NRO account, which also counts towards the LRS limit. Banks collect TCS at 20% on LRS remittances for gifts and investments once the remitter's total for the year exceeds Rs 10 lakh. TCS is not an extra tax: the donor claims it back as credit or a refund in their income-tax return. Our guide to how TCS affects NRI remittances explains the mechanics.

What is a gift deed, and when do NRIs need one?

A gift deed is the document that transfers an asset as a gift. Whether it is legally required depends on the asset.

• Immovable property: a gift is valid only through a registered deed, signed by or on behalf of the donor and attested by at least two witnesses (Section 123 of the Transfer of Property Act, 1882). Registration is compulsory under Section 17 of the Registration Act, 1908.
• Acceptance: the recipient must accept the gift during the donor's lifetime and while the donor can still give, otherwise the gift is void. The recipient usually signs the deed to record acceptance.
• Movable property such as money, jewellery or shares: a deed is not legally required; handing over the asset completes the gift. A signed gift letter or unregistered deed is still sensible evidence for large amounts.
• Shares and mutual fund units also need the transfer recorded with the depository or registrar, along with the gift deed.

A deed should name the donor and recipient with their relationship, describe the asset precisely, state that the gift is voluntary and without consideration, and record the recipient's acceptance. For property, include the survey or flat number, boundaries and title chain.

›Signing a gift deed from abroad

An NRI donor or recipient does not have to travel. You can sign the deed abroad before an Indian embassy or consulate, or before a local notary with an apostille, and send it to India, where it must be stamped within the period allowed by the state's stamp law, typically three months from arrival, and then registered. Alternatively, a specific registered power of attorney can let someone in India execute or accept on your behalf. Sub-registrars vary in what they accept, so check locally before anything is signed.

›Can a gift deed be cancelled?

Generally no. A completed gift is irrevocable unless the deed itself provided for revocation on a specified event, or it was obtained by fraud or coercion. One exception matters to parents gifting to children: under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, a tribunal can set aside a gift made by a senior citizen on the condition that the recipient looks after them, if that condition is broken. If that is the intention, write the condition into the deed.

Stamp duty on gift deeds

Stamp duty on a gift deed is a state matter and varies more than almost any other rate. Some states charge the same percentage as on a sale. Others give gifts within the family a large concession. Maharashtra, for example, charges Rs 200 on a gift of residential or agricultural property to a spouse, child, grandchild or the widow of a deceased son, and Uttar Pradesh charges a flat Rs 5,000 on gifts to specified family members. Registration fees, often around 1%, are on top. Check the current state rates in our state-wise guide to stamp duty and registration charges before you decide between a gift and a will.

Can an NRI gift property to parents in India?

Yes. Under FEMA, an NRI or OCI can gift residential or commercial property in India to a person resident in India, and parents qualify easily. Parents are relatives under the Income-tax Act, so they pay no tax on receiving it and you pay none on giving it. What you pay is the state stamp duty and registration fee on the gift deed.

FEMA's rules on property gifts use the definition of relative in Section 2(77) of the Companies Act, 2013, which is narrower than the income-tax list: spouse, father, mother, son, daughter, son's wife, daughter's husband, brother, sister, including step relations, and members of the same Hindu undivided family. Grandparents, grandchildren and in-laws other than a son's wife or daughter's husband are not on it. That matters most when property is gifted to or from someone living abroad. Agricultural land, farmhouses and plantations are different again: an NRI can gift them only to a resident Indian citizen, as explained in our guide to NRIs inheriting agricultural land.

Parents transferring a home to a child abroad often weigh a gift deed against a will. A gift settles ownership now but is hard to undo; a will keeps control with the parents until death. Our guide to transferring property to NRI children compares the options, and our guide to making a valid Indian will covers the alternative.

What happens when gifted property is later sold?

A gift is not a transfer for capital gains purposes, so the donor pays no capital gains tax on giving. When the recipient later sells, their cost is the donor's original cost and their holding period includes the donor's (Section 73 of the 2025 Act, earlier Section 49). If the gift was a taxable one, for example from a non-relative, the cost is instead the value that was taxed as income, so the same value is not taxed twice. If the recipient is an NRI, the buyer deducts TDS on the sale and the 12.5% long-term rate applies without indexation.

Clubbing: when your gift is still taxed in your hands

Clubbing rules (Section 99 of the 2025 Act, earlier Section 64) stop families shifting income to lower-taxed members by gifting the assets that produce it. The gift itself stays exempt, but the income it produces is added to the donor's income.

• Gift to your spouse: interest, rent or capital gains from money or property you gift to your spouse are taxed as your income, unless you are living apart under an agreement or court order.
• Gift to your son's wife: income from it is likewise taxed in your hands.
• Gifts to a minor child: the child's income is generally added to the parent with the higher income, with a small exemption per child.
• Gifts to adult children, parents and siblings: no clubbing. Their income from the gift is theirs.
• Income on income: only the first-level income is clubbed. Interest earned on reinvested interest is the recipient's own.

For an NRI, clubbed income that arises in India, such as FD interest or rent, is taxed in India as your income and must appear in your Indian return. Gifting to resident parents, who may have a lower slab and the resident-only rebate, does not trigger clubbing, as long as the gift is genuine and the parents actually control the money.

Worked example (illustrative)

Illustrative only; figures are rounded. Priya, an NRI in Singapore, does three things in FY 2026-27. She sends Rs 15 lakh to her mother in Pune. She gifts Rs 3 lakh to her cousin for his wedding. And she gifts Rs 10 lakh to her husband, who lives in India, which he puts in a fixed deposit earning Rs 70,000 interest.

Reporting gifts in your Indian income-tax return

A taxable gift is shown as income from other sources in the year it is received and taxed at your slab rate. NRIs get the basic exemption limit but not the rebate that lets residents earn up to Rs 12 lakh tax-free under the new regime, so a taxable gift can cost an NRI more than it would a resident. No TDS is deducted on a gift, so any tax is paid by you as self-assessment tax. Exempt gifts are not income, though large ones may need to appear in the assets and liabilities schedule if your total income exceeds Rs 50 lakh, and keeping the deed or gift letter answers any later question about the source of funds.

If the gifted money lands in an NRO account and you later want it abroad, it can be repatriated within the USD 1 million per financial year limit, with Forms 145/146 (earlier 15CA/15CB) and proof of the gift. Our NRO repatriation guide covers the paperwork.

Mistakes that turn a tax-free gift into a problem

• Treating cousins, nephews or close friends as relatives.
• Forgetting that the Rs 50,000 limit is for all non-relative gifts in the year combined.
• Gifting property with an unregistered deed, which does not transfer title at all.
• Assuming the income-tax relative list also works for FEMA property gifts.
• Gifting investments to a spouse to cut tax, then forgetting the income is clubbed back.
• Handing over large amounts in cash instead of through a bank.
• Ignoring your country of residence. The US, the UK, Australia and others have their own gift and inheritance rules and reporting, such as the US Form 3520 for large foreign gifts.