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Gift Tax was introduced with an objective to impose a tax on receiving and giving gifts under certain specific circumstances. With the passing of the Finance Bill 2019 in Parliament, some changes have been made in the rule regarding the taxation of gifts given by resident individuals to NRIs. Earlier, only resident Indians were paying Income Tax on Gifts received of more than Rs 50,000/- except gifts received from relatives. However, NRIs receiving gifts from other people than relative would not disclose such as income because the tax laws were worded in such a way that the onus was on the recipient to disclose such gifts and then pay the gift tax. The Budget 2019, however, has plugged this loophole and brought such gifts under the gamut of income-tax. The proposal intends to make any gifts or any money paid to another person except for specified persons mentioned in the Income Tax Act taxable if it exceeds Rs 50,000 in a financial year and NRIs will have to disclose such gifts received from India and pay tax on it as per the tax rules applicable. This amendment has been applicable with effect from 5th July 2019.
The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We strongly recommend you to seek professional guidance pertaining to your query or doubt.
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India is a vast country and a mystery to most. Those who live in it, those who now live outside of India or those who are just visiting. We, at NRIClub™, serve as a centralized hub of information for the residents, non-residents and travellers who are not familiar with various aspects of this great country.
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