Gift tax on cash to non-relative foreign national

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Gift tax on cash to non-relative foreign national

Hi, My friend who is an Indian citizen and resident wants to send cash gift to my child, who is a US citizen. I am US resident and Indian Citizen. Will there be a gift tax my child need to pay in India or US? Thanks

Profile photo of Anand Mehra Asked By: Anonymous 2 replies 0 helpful answers Last Updated: 2 weeks, 4 days ago
  • Profile photo of Anand MehraAnonymous

    Hi, My friend who is an Indian citizen and resident wants to send cash gift to my child, who is a US citizen. I am US resident and Indian Citizen. Will there be a gift tax my child need to pay in India or US? Thanks

  • Profile photo of Mitilesh GaglaniMitilesh Gaglani
    Moderator

    Hi, There won’t be any tax implications on the gift received by your child in US. As per the US tax law the person who is receiving the gift doesn’t have to pay the gift tax, but however, if the gift is above $100,000 then he will have to do the reporting requirement in US by filing form 3520, but no taxes.

    However as per Income tax Act, 1961 the receiver of gifts is required to pay tax if the amount of the gift exceeds Rs. 50,000/-. Thus, if the receiver of Gift is a resident in India he would be covered under the Indian Income tax Act, 1961 and thus liable to tax. if he is not a resident, no tax is required to be paid by him.

  • Profile photo of ASGASG
    Participant

    I am an adult NRI Indian citizen living in US for a long time. I wanted to confirm some rules regarding receiving money from India.

    If I receive money from my mother in the form of wired transfer to my US bank account, is that money taxable by india? In other words, do I need to report it to India in some way and/or pay taxes on this transferred money to India? If I need to report the information then where and how? Can she send it as a gift, or does it have to be a non-relative to qualify as a gift?

    Of course, I expect to pay taxes to the US on any interest from my US bank account where the money is received. It is my duty to report or pay taxes to India that I am unclear about.

    My best understanding is that no, the money is not taxable by India, and I don’t have to report it either. But I wished to confirm and understand the rules and regulations clearly regarding foreign exchange.

    Many thanks!

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