Gifts by Residents in Indian Rupees to Close Relative* :
As per the above mentioned regulation of Liberalised Remittance Scheme (LRS), a resident individual can gift to an Close Relative* NRI/PIO by way of crossed cheque / electronic transfer subject to the following conditions:
- The amount should be credited to NRO Account.
- Gift amount should be within the overall limit under Liberalized Remittance Scheme(LRS) of US$ 250,000 per financial year. Donor’s responsibility to ensure that amount of gift is within the limit of LRS.
As per the above mentioned regulation of Liberalised Remittance Scheme (LRS), a resident individual can gift person residing outside India subject to the following conditions:
- The amount of gift is to be given in Foreign Currency.
- Gift amount should be within the overall limit under Liberalized Remittance Scheme (LRS) of US$ 250,000 per financial year.
- The gift can be given to Non Relative* also.
Assets | Permissibility under FEMA | Liability under Income tax | ||
Gift from Relative | Gift from Non Relative | Gift from Relative | Gift from Non Relative | |
Relative as per section 2(77) of the Companies Act, 2013. | Relative as per section 56 of the Income Tax Act, 1961. | |||
Monetary funds through banking channels | Yes – in foreign currency as well as Indian Rupees; restricted to USD 250,000 per FY | Yes – only in foreign currency; restricted to USD 250,000 per FY | None | Taxable under section 56(2)(x) in the hands of recipient (Refer note below) |
Immovable Property in India (Other than agricultural property) | Yes | Yes | None | Taxable under section 56(2)(x) in the hands of recipient |
Assets | Permissibility under FEMA | Liability under Income tax | ||
Gift from Relative | Gift from Non Relative | Gift from Relative | Gift from Non Relative | |
Relative as per section 2(77) of the Companies Act, 2013. | Relative as per section 56 of the Income Tax Act, 1961. | |||
Shares, securities of an Indian company or mutual fund units | Yes – several restrictions applicable (Note 1) | No | None | Not applicable as not compliant under FEMA |
Interest in LLP | No | No | None | Not applicable as not compliant under FEMA |
