Tax-Free Gifts: If a relative sends ₹4 lakh from abroad, will tax be levied? Learn the rules and regulations of the Income Tax Department.

Tax-Free Gifts: If a relative sends you ₹4 lakh from abroad, will it be taxed or not? Let's find out the answer to this question and what the Income Tax Department rules are.

Tax-Free Gifts: If a relative sends you money from abroad, will that money be taxed or not? Such questions often cause concern for people. Today, we'll discuss whether any tax will be levied if a relative living abroad sends ₹4 lakh. Let's find out the answer according to the Income Tax rules.

Will money received from abroad be taxed?

Under the Income Tax Act, any money received from relatives, no matter how large, is completely tax-free. This means that any friend or family member living abroad can send ₹4 lakh or more to India and it will not be taxed. This exemption is part of the Income Tax Department's provisions that support genuine family transfers and create transparency in financial transactions.

Who can be considered relatives?

Relatives include your spouse, siblings, and their spouses, your parents' siblings, descendants such as children and grandchildren, and even your spouse's ancestors. Money received from anyone other than these individuals is not tax-exempt. Furthermore, only up to ₹50,000 can be solicited from non-relatives; any amount above this limit is considered income from other sources and is taxable according to your income slab.

Money Received through Marriage or Will

Money received through marriage or will, regardless of the sender's relationship to you, is completely tax-free. While money received from relatives is tax-free, it is crucial to maintain proper documentation. This includes gift deeds, bank statements, and correspondence proving that the amount was received as a gift.

It's worth noting that not all money received from abroad is tax-free. If the money is for freelancing work or business transactions, it's considered income. Tax is also levied on this amount. Similarly, salary, professional fees, or investment profits received abroad are considered taxable income and must be declared on your income tax return.