In plain words: want to gift money or company shares to a son, daughter or relative who is an NRI? It is allowed — but FEMA sets the channels and limits. Here is how to do it cleanly.
Gifting money to an NRI
- A resident can gift money to an NRI relative, typically credited to the NRI's NRO account.
- If you are remitting abroad as a gift, it goes under your LRS limit of USD 250,000 per year.
- Keep a gift deed/letter and proof of relationship.
Gifting Indian shares to an NRI
Gifting shares of an Indian company to a non-resident is a capital account transaction governed by the foreign-investment rules. It is permitted subject to conditions — for example, the sectoral caps and pricing/eligibility that apply to foreign holding, and reporting through the AD bank. In some cases prior approval can be needed.
- Check whether the company's sector allows the resulting foreign holding.
- Observe any value limits on gifts of shares to a non-resident.
- Complete the reporting for the transfer.
Gifting immovable property
A resident can gift residential or commercial property in India to an NRI relative; agricultural land, plantation and farmhouses have restrictions. A proper registered gift deed is essential.
Don't forget tax
Gifts between relatives are generally exempt from income tax, but gifts to non-relatives above a threshold can be taxable. Keep the FEMA and tax angles aligned.
Frequently asked questions
Can I gift cash to my NRI child? Yes — into their NRO account, or abroad within your LRS limit.
Can I gift company shares to an NRI? Yes, subject to the foreign-investment conditions and reporting.
Is a gift deed needed? Strongly advisable — and essential for immovable property.
How Vakil Help Desk helps
Vakil Help Desk advises on FEMA compliance, remittances, NRI matters, foreign investment and compounding — and represents clients in ED FEMA proceedings. If you have a cross-border transaction or a FEMA notice, we can help you get it right.
This article is for general legal awareness, not individual legal advice. FEMA rules, limits and forms are revised by the RBI and the Government from time to time, and the right treatment depends on your facts and the current position. Please consult a professional before acting on a cross-border transaction.