Yes, Non-Resident Indians (NRIs) can send money to India without tax implications on the transferred amount itself, as inward remittances are generally not taxed in India. For the recipient, money received from NRIs for family maintenance, education, or as gifts to close relatives is tax-exempt. Using NRE accounts makes these funds fully tax-free.
As per Section 206C(1G) of the Income Tax Act, there is no applicable TCS when NRIs transfer money from their NRO to their NRE account. This benefit allows NRIs to remit their income in India, like salary, dividends, business profits, rent, etc., via their NRO accounts.
There isn't necessarily an upper limit, but your bank or money transfer provider may impose their own restrictions. You'll also need to consider financial regulations in both the US and India. If you send more than 10,000 USD, you'll need to report your payment to the IRS.
Non-Resident Ordinary Account (NRO): An NRO account allows NRIs to deposit and manage income (like interest and rent) earned within India. NRI repatriation rules apply, and NRI fund transfers are limited to USD 1 million per financial year from their NRO accounts.
Inward Remittances by NRIs and Their Tax Rules
These remittances are commonly directed toward family needs. An NRI gift to parents in India, for example, is legally permitted and usually tax-exempt when sent through official banking channels.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
In short, if you receive a gift or bequest from a foreign person, and those funds or assets were held abroad, you likely won't owe taxes on that gift. However, it is essential to comply with reporting requirements by filing Form 3520 in a timely manner in order to avoid penalties and ensure compliance with IRS rules.
Example: A US resident receiving money from family abroad
Since it's a gift, she doesn't owe taxes on it — but because it's over $100,000, she must file Form 3520 with the IRS. If she doesn't, she could face steep penalties, even though no tax is due.
Yes, it is possible to transfer ₹20 Lakhs through NEFT, depending on your bank's daily limit. Increasing the NEFT limit in HDFC is a hassle-free process. To modify your third-party transfer (TPT) limit in HDFC Bank, log in to the official HDFC Bank portal using your ID and password.
New rules for NRIs in India focus on stricter tax residency criteria from April 2026, increasing the stay threshold to 120 days for high-income NRIs (over ₹15 lakh Indian income) to become Resident but Not Ordinarily Resident (RNOR) and introducing "deemed residency" for high-income Indians in tax havens; also, higher TCS thresholds for LRS remittances (to ₹10L) and removal of TCS for education loans are recent changes from Budget 2025-26, alongside increased reporting of foreign assets.
“Gifts” can be made in cash or other assets – securities, closely held business interests, real estate, artworks, collectibles or any other type of property. So long as the total market value of your gifts does not exceed $19,000 per recipient in 2026, the transfers are entirely gift tax-free.
You can claim TDS credit by filing an income tax return in the country. However, you cannot avoid the deduction of TDS from the NRO account interest. It gets reflected in Form 26AS for NRI taxpayers. On the other hand, the interest earned on an NRE or FCNR account is exempted from taxes in the country.
Foreign institutions usually withhold tax on investment income, but you still must declare it at home and use credits to avoid double taxation.
In her 2025 Budget speech, Finance Minister Nirmala Sitharaman shared big news. Under the new regime, if you earn up to Rs 12 lakh, you will not have to pay any income tax. Salaried taxpayers get an extra benefit too. The standard deduction, which was Rs 50,000 before, has now gone up to Rs 75,000 for the new regime.
Surcharge and Cess:
Surcharge under the New Regime (for individuals below 60 years): Income over ₹50 lakh but under ₹1 crore: 10% of income tax payable. Income over ₹1 crore but under ₹2 crore: 15% of income tax payable. Income over ₹2 crore but under ₹5 crore: 25% of income tax payable.
1. Who is the highest taxpayer in India in FY 2023–24? Reliance Industries is the highest tax-paying company, and Akshay Kumar tops among individual celebrities.
Under the new rules effective from April 1, 2025, no TCS is applicable for foreign remittances up to Rs. 10,00,000 in a financial year.
The requirement to pay taxes on overseas money transfers often depends on the nature and amount of the transfer. Large gifts, significant investments, and business-related transactions are frequently taxable. Conversely, smaller personal transfers and remittances for family support might be exempt.