How to Send Money from USA to India for Gift
Complete guide to sending USD to INR for gift. Steps, costs, regulatory notes, and tips to get the best rate.
Sending money as a gift to family or friends in India is a common and meaningful way for American NRIs to support loved ones. One key concern is ensuring the full amount arrives without unexpected fees or tax implications. This guide covers everything you need to know about gifting money from the USA to India, including tax rules, transfer limits, and best practices to avoid delays.
This guide is for Indian nationals living and working in the USA who want to send money to family or friends in India as a personal gift. It addresses compliance, cost, and convenience specific to US-to-India remittances.
Key Things to Know First
TCS Applies Above ₹7,00,000
If the total amount you send to India exceeds ₹7,00,000 in a financial year (Apr–Mar), 5% Tax Collected at Source (TCS) is applied on the full remittance amount above the threshold. This increases the total cost and should be factored into large gift transfers.
Purpose Code Selection
When initiating the transfer, select 'Gift' or 'Family Maintenance' as the purpose for remittance. This aligns with FEMA guidelines and ensures regulatory compliance for personal gifting.
Recipient Account Type
Root currently supports transfers to NRO and regular savings or current accounts in India. NRE account support is coming soon. Confirm your recipient’s account type to avoid failed transactions.
IFSC Code Accuracy
An incorrect IFSC code is a leading cause of failed transfers. Share with your recipient to double-check the 11-character code with their bank branch or passbook before sending.
Step-by-Step Guide
Confirm the Gift Amount and Timing
Decide how much you want to send, keeping in mind that sending more than ₹7,00,000 in a financial year triggers 5% TCS on excess amounts.
Choose a Reliable Remittance Service
Use a service like Root that offers the interbank exchange rate and zero fees, designed specifically for NRIs sending to India.
Enter Recipient’s Bank Details
Provide the recipient’s full name, bank account number, and correct IFSC code. Double-check for accuracy to prevent failed transfers.
Select Transfer Purpose
Choose 'Gift' or 'Family Maintenance' as the purpose of remittance during the transaction. This is required for compliance under FEMA regulations.
Complete Transfer and Track Delivery
Fund the transfer via bank transfer or debit card. Once processed, track the INR credit to the recipient’s account — most transfers complete within 1 business day.
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Get Started with RootRegulatory Notes
TCS on High-Value Remittances
Under Indian tax rules, 5% TCS is collected on remittances exceeding ₹7,00,000 in a financial year under the LRS. This applies even for gifts from NRIs. The liability is on the sender, and the collected tax can be claimed back during ITR filing if total taxable income in India is below threshold.
FEMA Compliance for Gifting
Foreign Exchange Management Act (FEMA) allows gifts to relatives or friends in India, provided the purpose is legitimate and funds are not used for prohibited activities like gambling or real estate speculation by the recipient.
Common Mistakes to Avoid
❌ Not accounting for 5% TCS on large transfers
The sender may be surprised by higher costs when sending over ₹7,00,000 in a financial year.
✅ Factor in 5% TCS on amounts above ₹7,00,000 — for example, sending $10,000 (~₹8.4L) triggers TCS on the full $10,000, not just the excess.
❌ Entering an incorrect IFSC code
Transfers with wrong IFSC codes are rejected or delayed, sometimes taking 3–7 days to reverse.
✅ Always verify the IFSC code through the recipient’s bank app or official website before submission.
❌ Using 'Loan' instead of 'Gift' as purpose
Misdeclaration can lead to compliance issues for the recipient when dealing with Indian banks or tax authorities.
✅ Select the correct purpose code — 'Gift' — during the transfer process to ensure clean documentation.
Frequently Asked Questions
Do I have to pay tax when sending money as a gift to India?
Yes, if your total remittances to India exceed ₹7,00,000 in a financial year, 5% TCS is collected on the entire amount sent above that threshold. For example, sending $12,000 (~₹10L) means 5% TCS applies to the full $12,000, not just the excess.
How much can I send as a gift to India in a year?
There is no legal limit on the amount you can send as a gift from the USA to India. However, transfers over ₹7,00,000 in a financial year trigger 5% TCS on the total amount above the threshold.
Does my family member in India need to pay tax on the gift?
No, gifts received by relatives (spouse, parents, siblings, etc.) in India are tax-free under Section 56(2)(x) of the Income Tax Act. The tax (TCS) is collected at source from the sender, not the recipient.
What bank details are required for sending a gift to India?
You need the recipient’s full name, bank account number, and correct 11-digit IFSC code. For example, SBIN0002499 is an IFSC code for a State Bank of India branch — always confirm it matches the recipient’s branch exactly.
How long does it take for a gift transfer to reach India?
Most transfers via Root are completed within 1 business day. For example, a transfer initiated Monday before noon EST typically arrives in the recipient’s Indian bank account by Tuesday evening IST.