Can NRIs gift money to HUF and save income tax? Gifting money to an HUF may seem like a simple family transaction, but for an NRI, there are tax rules to consider before making the transfer. The treatment can also depend on what happens to the money after it reaches the HUF.
So, if you are an NRI planning to gift money to an HUF, what should you know about the tax implications?
Can an NRI gift money to an HUF without paying tax?
The good news is that a gift made by an HUF member to the HUF can be exempt from tax in the hands of the HUF.
“When an NRI member transfers money to his HUF from an NRO account, the gift itself doesn’t attract any tax, either for him or for the family unit receiving it. The Income Tax Act treats any member of an HUF as a “relative” of that HUF, and gifts from relatives are exempt without any monetary ceiling,” says Aarjav Jain, ED & NRI Tax Expert, Dinesh Aarjav and Associates Chartered Accountants.
