Gift to a Non Resident

As per Sec 56(2)(x) of Income Tax Act, any sum of money paid in excess of Rs. 50,000/- in form of Gift is taxable in hands of recipient. However, proviso to said section excludes any gift received from relative and daughter falls within the definition of relative. As such gift received by the daughter will not be taxable in her hand.

However, it is to be noted that under the Liberalised Remittance Scheme, residents are only allowed remit overseas upto USD 2,50,000/- per year.

Further, there are various judicial pronouncements which state that no TDS needs to be deducted if income is not taxable in India.

Accordinly, no TDS is to be deducted on gift made to daughter.

For any further clarification, kindly mail me at mnshdugar @ gmail.com

No TDS is required to be deducted as it is a gift to Relative which falls under the exception of Sec. 56(2)(x).