"Tax Insights on Gifts & Inheritance for NRIs in India"

The article explains that NRIs in India are not subject to inheritance tax but may face capital gains tax on selling inherited assets, while gifts are taxable under the Income Tax Act, 1961, with exemptions for specified relatives and occasions. It also highlights rules for monetary and property gifts, repatriation of sale proceeds, and the benefits of Double Taxation Avoidance Agreements (DTAAs).


Inheritance and Gift Tax Rules for NRIs in India

Aspect Details
Inheritance Tax There is no inheritance tax in India. An NRI inheriting property or assets from someone in India does not have to pay inheritance tax, but they may need to pay capital gains tax if they sell the inherited asset.
Gift Tax Applicability India does not have a separate gift tax law. However, gifts are taxable under the Income Tax Act, 1961.
Exemptions for Gifts Gifts received from specified relatives (parents, siblings, spouse, etc.) are exempt from tax irrespective of the amount. Additionally, gifts received on occasions like weddings are tax-free.
Tax on Monetary Gifts Monetary gifts exceeding ₹50,000 from non-relatives (in a financial year) are taxable as "Income from Other Sources" for the recipient.
Tax on Immovable Property as Gift If an NRI receives immovable property as a gift without adequate consideration, the stamp duty value of the property is taxable as "Income from Other Sources" if it exceeds ₹50,000, except when received from specified relatives.
Taxation on Selling Inherited Assets An NRI selling inherited property in India may be liable to pay capital gains tax. The tax rate depends on the holding period of the asset and whether it qualifies as a short-term or long-term capital gain.
Repatriation of Sale Proceeds NRIs can repatriate proceeds from the sale of inherited property after paying applicable taxes. RBI guidelines must be followed for repatriation.
Double Taxation Avoidance Agreement (DTAA) NRIs may benefit from DTAA between India and their resident country to avoid double taxation on income arising from inherited or gifted assets.


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