1. Overview
Under the Income Tax Act, 1961, gifts received without consideration or for inadequate
consideration may be taxable under the head Income from Other Sources.
These rules apply equally to Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs),
Residents, HUFs, firms, and companies.
NRIs must evaluate the tax implications before receiving money, movable property, or
immovable assets to avoid unexpected tax liabilities.
2. Taxation Rules for Gifts Received by NRIs
Gifts become taxable if the value exceeds ?50,000 during a financial year.
| Type of Gift |
Monetary Threshold |
Amount Taxable |
| Money without consideration |
?50,000 (aggregate) |
Entire amount received |
| Immovable property without consideration |
Stamp duty value > ?50,000 |
Stamp duty value is taxable |
| Immovable property for inadequate consideration |
Difference > ?50,000
or > 10% of consideration |
Stamp duty value – consideration |
| Movable property without consideration |
FMV > ?50,000 |
FMV of the asset |
| Movable property for inadequate consideration |
FMV – consideration > ?50,000 |
FMV – consideration |
Movable assets include shares, securities, jewellery, bullion, artwork, paintings, sculptures, antiques, etc.
3. Exceptions – Gifts Not Taxable
Even if the gift exceeds ?50,000, it is exempt when received from:
- Relative (as defined under Income Tax Act)
- On the occasion of marriage
- By inheritance or will
- In contemplation of the donor’s death
- From local authorities or approved charitable institutions
- Medical-related COVID-19 payments (subject to conditions)
Definition of Relative: spouse, parents, siblings, children, lineal ascendants/descendants,
and their spouses. For HUF: any member of the HUF.
4. Gifts Deemed to Accrue in India
Gifts received by an NRI into an overseas bank account from a resident in India may be taxable in India if:
- Gift exceeds ?50,000
- Gift is not received from a relative
- Gift is not covered under the exempt categories
Effective from 1 April 2023, gifts made to RNOR individuals abroad may also be taxed in India.
5. Tax Rate & TDS on Gifts to NRIs
- Gifts taxable to an NRI are taxed at applicable slab rates.
- The person giving the gift must deduct 30% TDS under Section 195.
6. Common Scenarios Where NRIs May Incur Tax
- Receiving more than ?50,000 in NRO/NRE account from non-relatives
- Receiving more than ?50,000 in overseas account from resident individuals
- Purchasing immovable property or unlisted shares below fair market valuation