Q.1172 Repatriation of money

received as Gift from Indian

Parents

Question: Hello Mr. V. K. Chand I recently visited your website and I liked it's content. Lot of useful information for the NRI community. I have a question around repatriation of money received as gift from parents. I know gifts received from close relatives are not taxable in India. I am wondering what is the procedure to legally transfer the money received as gift to overseas bank account. Should I be depositing the money into my NRO account ? Thanks Answer: You are correct in stating there is no tax involved when a gift is made to a relative in India. The NRI receiving the gift would be exempt from taxation in India, However, keep in mind that the home country of the NRI would have their own taxation criteria and this would apply. NRI readers should not assume that whatever is tax free in India will also be tax free in their home countries. As for transferring money abroad, the first step would indeed be to deposit the amount received in your NRO account. Non-residents can then transfer funds abroad from their NRO accounts subject to the rules and regulations. Information on sending money abroad from NRO account, or transferring money from NRO account to NRE account for easy repatriation is provided on this website in various articles. Here are some links to a few pages on this topic: • How to Send money from India to a foreign country legally >> • How to Transfer money from NRO account to NRE bank account >> • NRI sending money outside India - Transfer funds from NRO to NRE >> • Remittance from NRO to NRE not taxable? >>

May be easier for Indian resident to

send money abroad to NRI directly

In some instances it may be a lot easier to send money abroad directly to the NRIs by parents. Instead of giving the money to their children in India and then let the children go through the process to transfer the funds to their banks abroad. Under the Liberalised Remittance Scheme (LRS) Indian residents [NOT NRIs] can freely send up to $250000 overseas every financial year for various reasons such as: • Education • Travel • medical treatment • Purchase of shares and property • Maintenance of relatives living abroad, gifting and donations. • Individuals can also open, maintain and hold foreign currency accounts with overseas banks for carrying out such transactions.