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.
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.
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 $12.92 million.
Uses of this gifting process could be:
Warning: An money sent to their parents becomes part of the parentās assets. At the time of death, others like the siblings of the NRI child might make a claim against these assets.
Serial # | Calendar Year | Exempted Amount ($) |
---|---|---|
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?
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.
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.
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.
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.
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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