NRI gift tax in India: what is taxable and what is exempt
NRI Dash Research Team · Last reviewed: 2026-06-28
Gift tax for NRIs refers to the income tax treatment of money or assets received as gifts from Indian residents or other sources, as governed by Section 56(2) of the Income Tax Act. Gifts received from specified relatives — including parents, siblings, spouse, lineal ascendants and descendants — are fully exempt from income tax regardless of the amount. Gifts from non-relatives, however, are taxable as income from other sources if the aggregate value received in a financial year exceeds Rs 50,000; the full amount, not just the excess, is then added to the recipient's income and taxed at the applicable slab rate. The same rules apply to NRIs receiving gifts from India as to resident Indians. Immovable property received as gift is valued at the stamp duty value, and movable assets such as jewellery or shares are valued at fair market value. Gift documentation and the relationship between the giver and recipient should be maintained to substantiate exemption claims during tax assessment.
Gifts to relatives are fully exempt — no gift tax
India does not have a gift tax. Gifts from relatives (spouse, siblings, parents, children and their spouses, etc.) are fully exempt from income tax in the recipient's hands. Gifts from non-relatives above ₹50,000 in a financial year are taxable as income. NRIs can gift foreign currency to resident relatives under FEMA's Liberalised Remittance Scheme.
Key points
- Relative gifts are tax-free — Gifts from a defined list of relatives are fully exempt regardless of amount — no upper limit.
- Non-relative gifts above ₹50,000 taxable — Gifts of money or property from non-relatives above ₹50,000 in a year are taxable as income in the recipient's hands.
- FEMA applies to cross-border gifts — NRIs gifting to resident relatives must follow FEMA rules. Resident Indians can gift up to USD 250,000 per year abroad under LRS.
Who is a 'relative' under Indian tax law
The definition of 'relative' under Section 56(2) of the Income Tax Act includes: spouse, siblings (and their spouses), parents (and their siblings), lineal ascendants and descendants (and their spouses), spouse's siblings (and their spouses).
Gifts within this defined list are fully exempt — a parent can gift any amount to a child, an NRI can receive any amount from a parent, without tax in either's hands.
Gifts between friends, colleagues, employer-employee (outside salary) and non-related individuals are taxable above ₹50,000.
NRI-specific gift scenarios
NRI gifts money to resident Indian family member: permitted under FEMA as a gift from an NRI to a relative — no limit specified, but practically the gifted funds go to the recipient's NRO account and the source should be documented.
Resident Indian gifts to NRI relative: permitted via the recipient's NRO account. Tax-free between relatives as above.
NRI gifts property in India to resident: property gift is a transfer — stamp duty applies. Capital gains rules may apply to the NRI donor if the property is transferred at below-market value.
Resident gifts to NRI under LRS: residents can remit up to USD 250,000 per year to NRI relatives under the Liberalised Remittance Scheme — this is a gift from India to abroad.
Frequently asked questions
Can an NRI gift money to a resident Indian friend?
Yes, but the recipient must include it as income if the total gifts from non-relatives exceed ₹50,000 in the financial year. The NRI has no Indian tax obligation on the gift itself.
Is there tax on gift of property to NRI?
For the donor (if resident): no income tax — it is a transfer, not a sale. Stamp duty is levied on property transfer even in gift. For the NRI recipient: the gifted property is not taxable at receipt (relative exemption applies if donor is a relative).
Can I gift money from an NRE account to my parents in India?
NRE funds are freely repatriable but gifting from NRE to a resident Indian bank account converts the funds to INR in the recipient's account. It is treated as a gift. Between relatives, it is tax-free.