Money received from close relatives living abroad is generally exempt from income tax in India, provided it is sent as a gift or support and not as payment for services. According to Indian tax laws, “close relatives” include children, parents, siblings, and certain other family members as defined under the Income Tax Act.
Daughter Sending You Money from Abroad? Know the Tax Benefits
If your daughter sends you money from a foreign country, it is treated as a gift from a relative and is not taxable in India. There is no upper limit for the amount in such cases. However, the sender must ensure that the transfer is routed through proper banking channels, such as wire transfers or authorised money transfer services, to establish a clear record for compliance purposes.
NRI Money Transfers from Close Relatives: No Tax in India
While the amount is not taxable as income, it’s advisable to maintain documentation such as transfer receipts, a relationship declaration, and a copy of the sender’s passport or identity proof. This can be useful if tax authorities request clarification.
If the money is invested in interest-bearing accounts or assets in India, any income generated from it—such as interest, rent, or capital gains—will be taxable in the hands of the recipient.
Experts recommend using official remittance channels under the RBI’s Liberalised Remittance Scheme (LRS) guidelines to ensure smooth transactions and avoid complications under the Foreign Exchange Management Act (FEMA).
This provision serves as a significant relief for families who depend on financial support from relatives settled abroad, especially in cases involving education, healthcare, or day-to-day living expenses.
