An individual having no personal income but living on gifts from Indians and NRI >2500. Does he have pay tax?

Answer 1

Answer is need not to pay Tax

Gift Tax shall not be charged in respect of gifts made by a person :-


being a non-resident individual to any person resident in India, of foreign currency or other foreign exchange , remitted from a country outside India during the period from 26th October, 1965 to 28th February, 1966 or such later date as the Central Government may, by notification in the Official Gazette, specify in this behalf – Section 5(1)(iia)
being a person resident outside India out of moneys standing to his credit in a Non-resident(External) Account in any bank in India-Section 5(1)(iib)
being a non-resident Indian to any of his relatives in India, of convertible foreign exchange remitted from a country outside India- Section 5(1)(iic)
being a non-resident Indian to any of his relatives in India of property in the form of any foreign exchange asset-section 5(1)(iid)
regarding one time gift made out of any deposit held by him under the Non-Resident(Non-repatriable) Rupee Deposit Scheme, 1992 of the Reserve Bank of India-Section 5(1)(iie)
to any of his relatives in the form of notified NRI bonds specified under Section 10(15)(iid) of the Income tax Act- section 5(1)(iie)


Income which do not form part of total income
An Exemptions exclusively for non-residents/ foreigners



Any Interest on or premium on redemption of such bonds or securities as the Central Government may notify.
Interest on Non-Resident (External) Accounts in any bank in India by NRIs. The exemption is valid only so long as the individual resides outside India. When he returns to India, he will no longer be entitled to such exemption. However, if he applies to the RBI to maintain or continue the NRE account, the exemption will be available so long as the permission remains valid-Section 10(4)(ii).
Interest on Foreign Currency Non-Resident Accounts
Interest on Foreign Currency ( Ordinary Non-Repatriable) Deposit Scheme
Interest on Non-Resident ( Non-Repatriable ) Rupee Deposit Scheme
Dividend on units of Unit trust of India provided the units are purchased from proceeds of foreign exchange remittance or from balances held in NR(E). FCNR accounts of the investor.
Interest on specified Saving Certificates received by Non-Resident Indian citizens or Persons of Indian Origin provided such certificates have been subscribed in convertible foreign exchange remitted from outside India through official channels.
Any allowance or perquisite paid or allowed as such outside India by the Government to a citizen of India for rendering services outside India- Section 10(7).
Tax on remuneration to a non-resident technician- tax paid to the Central Government by the employer ( being the Government, local authority, any corporation set up under special law or any approved institution or body carrying on scientific research), on remuneration payable to a technician ( being an individual) not resident in India in any of the four financial years immediately preceding the year in which he arrived in India and whose service as such commences after 31.3.1993, shall be exempt for a minimum period of 48 months commencing from the date of his arrival in India.- Section 10(5B)
Income exempt in respect of foreigners:


Passage money- Section 10(6)(I)
Remuneration of an official of an Embassy, High Commission, Legation, Affairs, Commissioner, Consulate or Trade Representative of a Foreign State or as a member of Staff of any of these officials.- Section 10(6)(ii)(iii)(iv)(v)
Remuneration received by employee of foreign enterprises- Section 10(6)(vi).
Salaries to non-residents employee on a foreign ship- Section 10(6)(viii).
Income of individuals engaged in research work in certain cases- Section 10(6)(x)
Remuneration received by certain foreigners, on traveling in certain establishments. – Section 10(6)(xi)


Tax paid on behalf of a foreign Company- the amount of tax paid by Government or an Indian concern on behalf of a foreign company in respect of royalty or fees for technical service paid under the agreement approved by the Central Government will not be included in computing the total income of foreign company.- Section 10(6A)
Tax paid by Government or an Indian concern on behalf of a non-resident or a foreign company in respect of its income.- Section 10(6B)
Income by way of fees for technical services received by a foreign company under an agreement the Central Government in connection with Indian Security. – Section 10(6C)
Income of an individual, and his family member assigned to duties in India in connection with any co-operative technical assistance programme or project under agreement between Government of India and the Government of a foreign State, received directly or indirectly from such foreign government, and any other income of such individual members which accrues or arises outside India and is not deemed to accrue or arise in India and such income is liable to tax in that foreign country. – Section 10(8) and (9)
Income of a consultant under a Technical Assistance Grant Agreement:


Any remuneration or fees received by a consultant, directly or indirectly, out of the funds made available to an international organization under a technical assistance agreement between that agency and the Government of a foreign State will be exempted from income-tax. The expression, consultant has been defined for this purpose to mean any individual who is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India, or any other person who is a non-resident and is engaged by the agency for rendering technical services in India in accordance with the agreement entered into by the Central Government and the agency and the agreement relating to engagement of the consultant is approved by the prescribed authority.Also, any other income accruing outside India to the consultant and taxable in the country of his origin, shall be exempt. – Section 10(8A)
The remuneration received by an employee of the consultant referred to in para (I) above will be exempted from income-tax, provided such employee is either not a citizen of India or, being a citizen of India is not ordinarily resident in India and the contract of his services is approved by the prescribed authority before the commencement of his service.- Section 10(8B)
The income of any family member of such individual as is referred to in the above para accompanying him to India, which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the country of his origin. – Section 10(9)
Interest on notified bonds. - NRI Bonds 1988 of State Bank of India/ NRI Bonds Second Series by SBI- India Development Bonds, arising to non-resident Indian or his nominee or survivor or the person to whom such bonds have been gifted by the non-resident, provided such bonds are purchased in foreign exchange and the principal and interest thereon, are not allowable to be taken out of India. – Section 10(15)(iid)


The Authority for Advance Ruling has held that interest on India Development Bonds is not taxable even when the non-resident becomes resident.


17. Any interest payable by the Government or a local authority, industrial undertaking, specified financial and banking institutions or scheduled Banks or a public company engaged in the business of providing long term housing finance, on moneys borrowed from sources outside India, exempt in the hands of the payee. - Section 10(15)(iv)

Answer 2

Gifts are always taxable dear. What ever amount it is. but there is no income tax. If the money is coming as donation then it is different.

Answer 3

No for less than Rs.2500/- need not to pay any tax by the reciver for such receipt.