In this article I will be writing about the one of the important point regarding sending the gift as NRI and how long one has to maintain the NRI status to avail the gift tax exemption. This article explains the same. Read this article to know more about the NRI status. Please subscribe to our articles here.
NRI Status and Gift Tax
As we know, any gift made from your NRE account is fully tax exempt. But, the corresponding section says “He was in India for 182 days or more during the relevant previous year…thus the assessee is clearly not entitled to exemption (on gift tax)”. That means in the same year you gifted from your NRE account, then coming back to India and staying in India for more than 182 days, you cannot claim the tax exemption for your gift.
Levy of tax is governed by the Gift Tax Act under which a resident outside India is exempted from the tax if he gives a gift from his NRE Account.
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However, in a current case the assessee, according to the tribunal, could not be considered as a resident outside India because he had stayed in the country for longer than 182 days during the financial year when the gift was made.
Summary
I hope this article will be useful for those who are gifting from abroad, and coming back to India shortly. That may impose tax liability for the gift. If you have any doubts please post it in the comments section.
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November 15, 2009 at 9:31 pm
Will the Gift to Children who is 18+ and 17+ and then return back to India in the same year, before March around 90 days be taxed?
Under whose name the Income from a Bank Fixed deposit in names of children and the mother in the order 1,2,3 will be considered and is it a valid Gift as one Fixed deposit considers more names?
November 15, 2009 at 10:05 pm
Sir,
I am a NRI. As per your comments for NRI gifttax , gift from NRE account is free from tax. But giving gift to spouse is totally free no matter from where it has been given. As I transfer some amount to my wife saving account from foreign exchange(NRI income) every month, Is it ok or any procedure required. I have all receipts of these transfer amounts from abroad. Any gift declaration required or it will be declared automatically as a gift as this is my NRI income.
Please light me on this matter.
Thanks
Dhaval
November 16, 2009 at 6:14 am
Hello Dhaval,
If you have the receipts of those transactions, that is enough.
Thanks,
Krishna
November 21, 2009 at 1:33 am
Sir,
I am a NRI. I gave 5lakhs cheque as a gift to my wife normal savings accounts from my NRE account. She invested this amount in small savings as MIS/KVP. I want to know who will be liable to pay the tax from the interest of these savings. My friend told me that if indian income I gift to wife than income generated will be clubbed to donor(me) but if NRI income to be gifted to relative than tax liability will be of donee. Is this true.
Please clear me this issue.
Thanks
Dhaval
November 21, 2009 at 11:46 pm
I am a NRI. If I give 5lakhs as a gift to my wife from my NRE account & in turn she invest this amount in small savings as MIS/KVP. I want to know who will be liable to pay the tax from the interest of these savings. My friend told me that if indian income I gift to wife than income generated will be clubbed to donor(me) but if NRI income to be gifted to relative than tax liability will be of donee. Is this true.
Please clear me this issue.
Thanks
Dhaval
November 23, 2009 at 3:04 am
Sir,
From your article of NRI status & gifttax it is clear that gift from NRE account is totally free given to anybody whether relative or nonrelative.
But I am still confused who will be tax liable of the income generated from investment of this gift/money in India.
As per my knowledge if indian income i represent as a gift to relative/nonrelative than income generated from this gift will be clubbed to me. But in this case this income generated outside india & given to relative/nonrelative so tax liability will be that particular individual or still of me.
Also let me know it will be the same that i give gift from my NRE account(india) or directly transfer from foreign exchange to particular savings account in India. It will be same gift law or diffrerent laws there
Please clear the subject.
Thanks
Dhaval
November 25, 2009 at 2:07 am
Sir,
I am waiting for the answer for the queries raised on 23rd Nov by me regarding NRI income investment & tax implicity
Please clear me.
Thanks
Dhaval