Ready Reckoner
READY RECKONER #6 · FAMILY MONEY

Can my parents gift money to me while I live abroad?

Yes — but understand three separate questions.

SIMPLE EXAMPLE

Father in India wants to gift ₹10 lakh to his son working in Dubai.

Don't try to understand everything at once. Check it in this order: Can he give it? → Is the gift taxable? → Can the son later take it abroad?

1 · FEMA / RBI

Can the parent give the money?

Yes, parent → child fits the relative test used for this RBI route.

RBI permits a resident individual to make a rupee gift to an eligible NRI/PIO relative through crossed cheque or electronic transfer. For this route, the money is credited to the NRI's NRO account and is counted within the resident donor's overall LRS limit.

2 · INCOME TAX

Will the child pay Indian tax just because the parent gifted the money?

Normally no.

Income Tax uses its own definition of “relative”. A parent is a lineal ascendant, so a genuine parent-to-child gift is covered by the relative exemption. Keep a clear banking trail and gift record, especially for a large amount.

3 · REPATRIATION

Can the child later send that ₹10 lakh abroad?

Potentially yes — but this is a separate FEMA/banking step.

The gift entered the NRO account. It does not automatically become an NRE-style freely repatriable balance. RBI permits eligible NRO balances of NRIs/PIOs to be remitted up to USD 1 million per financial year, subject to applicable conditions, taxes and bank documentation.

Remember only this:

FEMA/RBI: Can the money move from resident parent to NRI child?
Income Tax: Is receiving the gift taxable?
Repatriation: Can the NRI later move the NRO money outside India?

These are three different questions.

Why does “relative” sometimes become confusing?

Because RBI/FEMA and Income Tax can use different legal definitions for different purposes. For a simple parent-to-child gift, the relationship fits both relevant tests. But for an uncle, aunt, in-law or another family member, do not assume that qualifying as a “relative” for Income Tax automatically means the same RBI/FEMA gift route applies.

Before transferring a large gift

✓ Confirm the relationship and FEMA route with the bank.
✓ Transfer through a clear banking channel to the appropriate account.
✓ Keep a simple gift declaration/deed and relationship proof.
✓ Check the donor's available LRS limit.
✓ If the money will later go abroad, ask the bank/CA what NRO repatriation and tax documents will be required.

Want to verify the rule yourself?

FEMA / RBI — Gift in Rupees to NRI Close Relative → RBI — Liberalised Remittance Scheme FAQ → RBI — NRO / NRE Account & Repatriation Rules → Income Tax — Official FAQ on Gifts & Relatives → Income Tax — Section 92 (Gift Rule) →

Last verified: 17 August 2026. General educational guidance. Large or unusual cross-border gifts should be checked with the authorised dealer bank and tax adviser before execution.

Still unsure?

Tell Amrutha who is giving the money, who is receiving it, the amount and whether the money will stay in India or later move abroad.

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