What are the tax implications while sending money abroad?

Sending money from the US-

Since 2013, US citizens sending money overseas are supposed to pay the tax on the entire amount, if it exceeds $14,000 per person, in a year. In case you are married, even your spouse can participate in sending money as a gift. So, you can potentially send $28,000. The tax would be applicable on the entire amount and not the amount that it exceeds. The person who is gifting has to pay the tax.

You can also divide the amount and send it to number of people to avoid taxation. Say you sent $40,000 to 4 different person, you have given a $10,000 to each, and as per the law, its under $14,000 per year. You are not liable to pay tax on the amount now as the number is below $14,000.

Receiving money in India -

As per current tax laws, if an individual receives cash or non-cash gifts from persons other than blood relatives* in excess of Rs. 50,000 in a year, the whole of such gift received will be treated as the individual's income.

*A close or blood relative would include any of the following:

  • Spouse of the individual
  • Brother or sister of the individual
  • Brother or sister of the spouse of the individual
  • Brother or sister of either of the parents of the individual
  • Any lineal ascendant or descendant of the individuals
  • Any lineal ascendant or descendant of spouse of the individuals

Learn more atTax Implications When Making an International Money Transfer

Note: The information presented here is generic and may not be accurate. Please consult your CPA, tax expert or tax attorney for specific tax advice and inquiries.Visit IRS Website for US tax information.

Most Viewed Answers

There is absolutely no limit of sending money to India, provided you pay the required taxes. No limit on daily and monthly transaction. only money sending have limit for sending amount for indivi…

The legal limit to carry cash currency in US Dollars from India to USA is USD 3000 per person per trip. However, you can carry up to US $10,000 in form of currency notes, Travelers check, etc. wi…

Import: Currency Regulations in India Local Currency (INR) - Any person resident in India, who had gone out of India on a temporary visit, may bring into India at the time of his return from…

Related Articles

House Property and NRI Account in India- Does FATCA Apply?

As a Non Resident Indian and under the Income tax law of India, the NRI is not taxable in India for any of his income which he earns outside…

FATCA MOU with India – A Boon or Burden?

Foreign Account Tax Compliance Act (FATCA) is a US legislation aimed at combating tax evasion. Under this legislation, you will have to decl…

Banking Services for NRI’s: Introduction

When one moves out of India, the first thing they do is to open a bank account in India for themselves as Non Residents. Rightly so, they ca…

Go Mobile

Get the Best Exchange Rates, Important Remittance Information and
Special Promotion Alerts on the go! Download Our Mobile App on your Smartphone or Smartwatch.

google play apple app store