How can NRIs in the US gift money to their parents in India in 2023?
This article discusses the mechanics and tax exemption rules applicable to US-based NRIs who wish to gift money to their parents in India.
How can NRIs in the US gift money to their parents in India in 2023?
Posted on 04 Jan 2023
Author: Sayan Sircar
6 mins read
Get new post notifications on WhatsApp!
This article discusses the mechanics and tax exemption rules applicable to US-based NRIs who wish to gift money to their parents in India.
Disclaimer: Taxation is a dynamic concept and the content of this article is valid on the date of publication and any subsequent updates. Always consult a professional tax advisor before doing anything that leads to taxes being due.
š Topics covered:
- How much exemption can NRIs in the US get when they gift money to their parents in India in 2023?
- What has been the historical exemption limit for gifts?
- FAQs on the mechanics of gifting to parents
How much exemption can NRIs in the US get when they gift money to their parents in India in 2023?
USD 17,000 per person is the annual Gift Tax Exemption amount for 2023 as notified by the IRS.
This amount is offset against the lifetime Gift and Estate Tax Exemption limit. This limit is currently at $12.92 million.
Uses of this gifting process could be:
- How can NRIs easily manage their parentsā finances in India where NRIs gift money to their parents in India to manage their day-to-day expenses
- Investing in India in the name of their parents to reduce their globally taxable income
- Purchase property in India in the name of parents to create rental income for them
Warning: An money sent to their parents becomes part of the parentās assets. At the time of death, others like the siblings of the NRI child might make a claim against these assets.
What has been the historical exemption limit for gifts?
| Serial # | Calendar Year | Exempted Amount ($) |
|---|---|---|
| 1 | 2002 | 11,000 |
| 2 | 2003 | 11,000 |
| 3 | 2004 | 11,000 |
| 4 | 2005 | 11,000 |
| 5 | 2006 | 12,000 |
| 6 | 2007 | 12,000 |
| 7 | 2008 | 12,000 |
| 8 | 2009 | 13,000 |
| 9 | 2010 | 13,000 |
| 10 | 2011 | 13,000 |
| 11 | 2012 | 13,000 |
| 12 | 2013 | 14,000 |
| 13 | 2014 | 14,000 |
| 14 | 2015 | 14,000 |
| 15 | 2016 | 14,000 |
| 16 | 2017 | 14,000 |
| 17 | 2018 | 15,000 |
| 18 | 2019 | 15,000 |
| 19 | 2020 | 15,000 |
| 20 | 2021 | 15,000 |
| 21 | 2022 | 16,000 |
| 22 | 2023 | 17,000 |
You can use this table to plan the total offset against the lifetime Gift and Estate Tax Exemption limit.
Related:
How much money can NRIs gift to parents in India?
FAQs on the mechanics of gifting to parents
Is a gift deed necessary when NRIs gift assets to parents?
There is no tax payable by the gift receiver. However, to be on the safe side from the Indian tax perspective, it is better to create a gift deed.
Which account should be chosen to transfer money to India?
The US-based NRI can transfer money directly to the bank account of their parents. The NRI should not be a joint holder in that account since then it will not be a gift.
Can other legal heirs later lay a claim on the amount to the parents?
If the parents die intestate, i.e. without a will, other legal heirs like siblings of the NRI can lay a claim on the gifted assets. If multiple heirs exist, it is prudent to make a will.
Is there further tax on the gifted amount from NRI to parents?
There is no tax at the point of gifting on the parents. But there will be tax out of any income from the amount that will be paid by the parents since that will be in their name.
What's next? You can join the Arthgyaan WhatsApp community
You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.If you liked this article, please leave us a rating
The following button will take you to Trustpilot:Discover an article from the archives
Worked out case studies for goal-based investing
-
Case study: how can this middle aged investor with two children plan for retirement and children's goals?
This article shows how a single-income middle aged couple with two small children reach their retirement and childrenās goals.
-
Case study: can this double income single kid family reach FIRE at 50?
This article shows how a double-income couple with a 2-year old reach their FIRE dream at the age of 50.
-
Case study: how a family in their mid-30s with a newborn kid can FIRE and invest in real estate?
This article shows how a double-income couple with a newborn child can invest for their future goals of FIRE and real-estate investment.
-
Case study: how this double income recently married family can perform DIY goal-based investment planning
This article shows how a young just-married couple can invest for future goals using the Arthgyaan goal-based investing tool.
-
Case Study: How should couples in their 40s with a new baby plan their financial future?
Did you welcome a bundle of joy in your 40s? This article will discuss ways of planning the childās (and yourās financial future)
-
Case study: how this double income single kid family can perform DIY goal-based investment planning
This article shows how a very typical salaried couple with one child can invest for future goals using the Arthgyaan goal-based investing tool.
Previous and next articles:
Choosing Investments
Tax
Mutual Funds
What are the best tax-saving ELSS mutual funds in 2023?
This post sifts through 38 options to find the best ELSS funds for investing in 2023.
Published: 1 January 2023
5 MIN READ
FAQ
Frequently asked questions on Tax Deducted at Source (TDS): the complete guide
This article compiles an exhaustive list of FAQs on the concept of Tax Deducted at Source (TDS).
Published: 8 January 2023
1 MIN READ
Latest articles:
House Purchase
How much EMI do I have to pay for my home loan?
This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.
Published: 29 September 2023
1 MIN READ
Retirement
Reader Questions
How much money does this 39 year old investor need to invest per month to retire at 58?
A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.
Published: 27 September 2023
7 MIN READ
Topics you will like:
Asset Allocation (20) Basics (8) Behaviour (10) Budgeting (11) Calculator (17) Case Study (6) Children (12) Choosing Investments (38) FAQ (6) FIRE (13) Gold (11) Health Insurance (4) House Purchase (17) Insurance (15) International Investing (10) Life Stages (2) Loans (9) Market Movements (13) Mutual Funds (29) NPS (6) NRI (13) News (9) Pension (8) Portfolio Construction (46) Portfolio Review (27) Reader Questions (6) Real Estate (6) Retirement (36) Review (12) Risk (6) Safe Withdrawal Rate (5) Set Goals (27) Step by step (14) Tax (37)Next steps:
1. Email me with any questions.
2. Use our goal-based investing template to prepare a financial plan for yourselfOR
use this quick and fast online calculator to find out the SIP amount and asset allocation for your goals.
Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.
Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.
More posts...Disclaimer: Content on this site is for educational purpose only and is not financial advice. Nothing on this site should be construed as an offer or recommendation to buy/sell any financial product or service. Please consult a registered investment advisor before making any investments.
This post titled How can NRIs in the US gift money to their parents in India in 2023? first appeared on 04 Jan 2023 at https://arthgyaan.com
We are currently at 299 posts and growing fast. Search this site: Copyright Ā© 2021-2023 Arthgyaan.com. All rights reserved.