India is the world’s leading remittance recipient, with more than $12 billion sent from the US to India in 2019 alone. Knowing how much you’ll pay in tax and how the process works can give you peace of mind when sending money from the US to India.
There is no money transfer limit on how much you can transfer to India from the US, at least none imposed by the Indian or US governments. However, the specific money transfer or banking service that you are using might impose limits on how much they can accommodate in a single transfer. If you’re planning on initiating a large transfer, consider using a limit-free provider such as Xe.
When you send money to any person abroad in India, the first $15,000 USD will be exempt from taxes by the IRS under the Gift Tax policy. This limit is charged on a per-person basis — if you would like to send $15,000 USD each to multiple persons, you will still be off the hook for any gift taxes.
If you do send more than the allotted $15,000 USD, all you need to do is to file an IRS Form 709 to disclose the gift. On top of the $15,000 annual exclusion, you get an $11.7 million lifetime exclusion in 2021. Should you be fortunate enough to have remitted over $11.7 million, you may then be liable for gift taxes at a rate anywhere from 17% to 40%.
Sending a lot of money out of the country? Know what the IRS expects of you.
There is no recipient tax on money being transferred from abroad to India when it’s being sent to blood relatives. In general, “blood relatives” — including spouses, children and grandchildren, siblings or in-laws — don’t pay tax on any amount you send.
However, if you’re sending more than about $700 to someone in India who isn’t a blood relative, they’ll need to report it on their taxes. No matter how you send the money, your recipient could be on the hook for a gift tax if they aren’t a blood relative, as regulated by the Indian Income Tax Act.
In February 2020, the Indian government introduced a new law that would put in new limits for remittances out of India.
Because of this law, resident individuals in India can only remit a maximum of USD $250,000 overseas each year. Additionally, any amount remitted above ₹700,000, which translates to roughly 9,500 USD, will be taxed at 5%.
Finder data suggests that men aged 25-34 are most likely to be researching this topic.
| Response | Male (%) | Female (%) |
|---|---|---|
| 65+ | 2.17% | 1.05% |
| 55-64 | 3.70% | 1.77% |
| 45-54 | 8.21% | 3.34% |
| 35-44 | 20.14% | 8.07% |
| 25-34 | 21.19% | 9.08% |
| 18-24 | 14.65% | 6.63% |
If you don’t report a transfer on your taxes in India, you could be charged a 10%, 50% or 200% penalty on the taxes owed, depending on whether it was considered intentional or not.
With so much attention on money entering and leaving India, if you fail to report large sums, don’t know you have to report them or don’t report them correctly, it will likely be discovered. Make sure to declare any large remittance as income on your general tax return with the Indian Income Tax Department.
To avoid the severe penalties that could come with a failure to report large sums of money into the country, speak with a professional to guarantee that everything complies with the laws of both the US and India.
Your recipient can pick up the cash in person or have the money deposited directly into their bank account or mobile wallet. Not every provider will offer all three options, so check before initiating a transfer.
In general, your recipient will provide ID or a confirmation number for the transaction to pick up the money in cash.
Whether products shown are available to you is subject to individual provider sole approval and discretion in accordance with the eligibility criteria and T&Cs on the provider website.
Are you visiting from outside the US?
You’ll likely need to file with the IRS, and your recipient may have to pay a gift tax.
Your recipient may need to pay taxes on a large remittance, and you’ll likely need to report it.
Your recipient won’t be on the hook for any taxes, but there may be limits on how much you can send.
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if someone wants to transfer 70000dollars in my account do i need to pay any charges for that transaction
Hi Nil,
Thank you for reaching out to finder and leaving a question.
In general, if your recipient is a “blood relative” — including spouses, children and grand-children, siblings or in-laws — they do not pay tax on any amount that you send. Your recipient also won’t pay tax on any money sent as part of an inheritance or a wedding gift.
However, if your recipient is not related to you, any amount over 50,000 rupees (about $750, depending on the exchange rate) that you send is taxable and must be declared as income.
Regards,
Val
my mom friend from the Paris sent some cash to my mom by bank how can she got that money in her account.Is there any proceed to got that money in her account??
Hi Seyjal,
Thanks for reaching out! If your mom’s friend sent the funds to your mom’s bank account, this means that the money is already in her account. To withdraw the money in your mom’s account, you must ask permission from her as it is her own personal account and the bank won’t allow anyone else aside from your mom to withdraw any amount of money from her account without her approval. Hope this clarifies!
Best,
Nikki
My friend want to help me on buying home in india, and he will send 1.5 lakh every month from France. Do I need to declare anything? As he is sending to my personal account.
Hi Pankaj,
Thanks for getting in touch with finder. I hope all is well with you. :)
The answer would depend on different factors. For one, if your friend is a blood relative, then you won’t pay taxes. However, if your friend is not related to you, any amount over 50,000 rupees that he/she sends is taxable and must be declared as income.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
my mom friend from the uk sent some cash to my mom by bank true india amount 25000gbp to malaysia . i would like to know does my mom need to pay tax for the transfer??
Hi Raj,
Thanks for getting in touch with finder. I hope all is well with you. :)
That would depend on the nature of the money, how it was acquired, and its purpose. Moreover, it will also depend on whether your mom friend is blood-related to your mom. If the sender and recipient are not related to each other, any amount over 50,000 rupees sent must be declared as income and therefore, should be taxed.
You would need to speak to a tax specialist to get a more personalized advice.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
My frnd want to send 10million dollars to India and invest here . for that I have to pay 58000Rs custom duty and 125500 RS for anti terrorist certificate. Is it true or fraud
Hi Karan,
Thank you for leaving a question.
There is no limit to bring foreign exchange in India from the US. However, the aggregate value of foreign currency notes in excess of USD 5000 or equivalent and the aggregate value of foreign exchange in the form of currency notes, bank notes or traveller’s cheques in excess of USD 10,000 or its equivalent must be declared to the customs.
The limit for foreign currency notes is USD 3,000 and must be declare by filing CDF (Currency Declaration Form) if it exceeds the limit. I am not sure on the exact amount that needs to be paid for customs and the anti terrorist certificate but you may contact the Commissioner of Customs office at +91 22 2681 6667 which is open 24/7 for further inquiry on this. Hope this helps!
Cheers,
Reggie