Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Gifts from relatives are exempt
The tax law lists ‘relatives’ — parents, spouse, brothers and sisters, lineal ascendants and descendants, and a few others — whose gifts to you are exempt regardless of amount. So money or assets from your parents, siblings or spouse are not taxable in your hands.
Gifts from others
A gift from a non-relative (a friend, say) is taxable as your income only if the aggregate exceeds ₹50,000 in the financial year — in which case the whole amount is taxed, not just the excess. Gifts to NRIs from residents can have their own deemed-accrual rules — confirm for large or non-relative gifts.
A worked example
Example: your father transfers ₹30 lakh to your NRO account — fully exempt, being a gift from a relative (keep a simple gift letter as proof). But ₹1 lakh from a family friend is taxable, since it crosses ₹50,000. Gifts of inherited assets follow separate rules. To take a large gift abroad, use the USD 1 million route. A simple gift deed or letter stating the relationship is the single most useful document to keep, because years later a bank or assessing officer may ask how the money in your NRO account arose, and ‘a gift from my father’ is only convincing on paper. For very large family transfers, it is also worth checking the giver’s own position, since the source of their funds can be questioned too. Our NRI tax service can advise.