India budget 2019 has proposed to draw attention to a loophole that helped Non-Resident Indians (NRIs) avoid the tax net on gifts received from India. Whatsoever gift received by a taxpayer in India is taxable under the head, income from other sources, as per their slab.
NRIs who have received gifts from India after July 5 - whether in terms of money (above Rs 50,000) or immovable property (the worth of which exceeds Rs 50,000), will need to take a firm look at the new proposal.
A big fat Indian wedding, where you have invited relatives from your home country and received gifts, will continue to be exempt, however. Existing exemptions available to a taxpayer in India will also apply to NRIs.
Therefore, gifts of a value below Rs 50,000 will continue to be exempt. Likewise, gifts received on certain occasions, such as marriage or by way of inheritance, won’t come under the tax net. In a similar way, gifts from relatives in India will continue to be exempt.
However, the term relatives are narrowly defined - covering gifts from parents, siblings, spouse, maternal and paternal uncles and aunts (and their spouses).
By Sowmya Sangam