Does donee need to pay gift tax on money coming from India?whts the limit for fund tranfer?

Answer 1

If you receive any money or property as a gift, you (the receiver) does not have to pay any gift tax or file gift tax return. However, since it is coming from a foreign country, the IRS wants to make sure that it is a actually a gift.

So the receiver must file File 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. You file form 3520 if
"You are a U.S. person who, during the current tax year, received either:
*a. More than $100,000 from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests; or
*b. More than $12,760 from foreign corporations or foreign partnerships (including foreign persons related to such foreign corporations or foreign partnerships) that you treated as gifts."

The foreign person sending you the gift from a foreign country does not file any return in the U.S.

Indian Rupee is not a free traded currency. So the donor must follow RBI guidelines. May be the donor has to report this gift to the RBI. The donor may also have gift tax liabilities in India. For more information on RBI regulations and donor's gift tax liabilities you can post a new question at Taxes -> India. You will get the information.

You can download Form 3520 and Instructions from
http://www.irs.gov/

Answer 2

The recipient of a gift never pays tax. However since it is coming from a foreign country you must file a Form 3520 return. If it's determined to be a bona-fide gift there will be no tax due. Failure to file the Form 3520 will draw significant penalties.

The donor technically has to file a Gift Tax return but if they're non-resident aliens they cannot be compelled to file a US return.

Answer 3

tax on a nickel is so small it wouldnt ever show up anywhere, dont worry about it

Answer 4

As long as its under 12000, no.