NRI Gift Deed: A Comprehensive Guide for NRIs (2026)

A member in our WhatsApp community recently shared a situation that comes up far too often.

His father in India wanted to transfer the family house to him. Simple, right? Father to son. Should be straightforward.

Except he’s a US citizen with an OCI card. Living in Texas. Never dealt with Indian property paperwork. Didn’t know what FEMA allows. Didn’t know the tax rules. And the local lawyer in his father’s town had never handled an NRI gift deed before.

He almost made two costly mistakes – one that would have triggered unnecessary tax, and another that could have violated FEMA rules.

Gift deeds between NRIs and their families are incredibly common. Parents gifting property to children abroad. NRIs gifting money to parents. Siblings transferring inherited property.

But the rules are specific. Get them wrong and you face tax penalties, FEMA violations (fines up to 3x the transaction value), or a gift deed that’s legally invalid.

This guide covers everything – what a gift deed is, who can gift what to whom, the FEMA rules, tax implications, stamp duty, registration process, and how to do it all while sitting abroad.

What Is a Gift Deed?

A gift deed is a legal document that transfers ownership of an asset from one person (the donor) to another (the donee) without any money changing hands.

No payment. No consideration. Just a voluntary transfer.

Under Indian law, a gift deed is governed by:

• Section 122 of the Transfer of Property Act, 1882 – Defines what constitutes a valid gift
• Section 17 of the Registration Act, 1908 – Mandates registration for immovable property gifts
• FEMA, 1999 – Regulates cross-border gift transactions involving NRIs
• Income Tax Act, 1961 – Determines tax implications

For a gift to be legally valid, it needs three things:

1. The donor must voluntarily transfer the asset
2. The donee must accept the gift
3. Both must be alive at the time of transfer

Once registered, a gift deed is generally irrevocable. Unlike a will (which takes effect after death and can be changed anytime), a gift deed transfers ownership immediately and permanently.

This is both its biggest advantage and its biggest risk. More on that later.

Gift Deed vs Will: Which Should NRIs Use?

This is one of the first questions families ask. Let me simplify it.

Parameter	Gift Deed	Will
When does transfer happen?	Immediately, during donor’s lifetime	After donor’s death
Can it be changed?	Generally irrevocable once registered	Can be changed anytime
Registration	Mandatory for immovable property	Not mandatory (but recommended)
Stamp duty	Yes, applicable	No stamp duty
Income tax on transfer	Gift tax rules apply	Inheritance is fully tax-free
Disputes	Harder to contest	Can be contested by legal heirs
Donor’s control	Lost immediately	Retained until death

When a gift deed makes more sense:

• You want to avoid inheritance disputes after your passing
• You want to ensure a specific person gets the property
• You’re doing estate planning while you’re healthy and active
• Multiple legal heirs exist and you want clarity now

When a will makes more sense:

• You want to retain control of the property during your lifetime
• You want flexibility to change your mind
• Tax efficiency matters (inheritance is completely tax-free)
• You don’t want to pay stamp duty

Many NRIs in our community use a combination – gifting some assets now and leaving others through a will.

For more on property-related decisions, check our guide on buying property in India.

FEMA Rules: Who Can Gift What to Whom

This is where it gets specific. FEMA governs all cross-border gift transactions involving NRIs.

Let me break it down by scenario.

Scenario 1: Resident Indian Gifting to NRI

What can be gifted:

• Residential property – Yes
• Commercial property – Yes
• Agricultural land – Yes (this is the one exception – a resident Indian CAN gift agricultural land to an NRI relative)
• Money (to NRO account) – Yes, up to $250,000 per financial year under LRS
• Shares and securities – Yes, with conditions (must not exceed 5% of paid-up capital, sectoral caps apply)
• Movable property (jewellery, valuables) – Yes

Conditions:

• The donor must be a relative (as defined under FEMA/Companies Act 2013)
• Gift must be made in Indian Rupees through banking channels
• Monetary gifts must go to the NRI’s NRO account

Who counts as a “relative” under FEMA?

This is the Companies Act 2013 definition:

• Spouse
• Parents (including step-parents)
• Children (including step-children)
• Siblings (including step-siblings)
• Spouse of any of the above

Note: The Income Tax Act has a wider definition of “relative” that also includes grandparents, grandchildren, uncles, aunts, and their spouses. For gift tax purposes, this wider definition applies.

But for FEMA property transfer purposes, the Companies Act definition is used.

Scenario 2: NRI Gifting to Resident Indian

What can be gifted:

• Residential property – Yes
• Commercial property – Yes
• Agricultural land – Only to a resident Indian (cannot gift to another NRI)
• Money – Yes, from NRO/NRE account
• Shares – Yes, with conditions (RBI approval may be needed if shares were bought from NRE account)
• Movable property – Yes

Conditions:

• Must comply with FEMA regulations
• Property gift deed must be registered in India

Scenario 3: NRI Gifting to Another NRI

What can be gifted:

• Residential property – Yes
• Commercial property – Yes
• Agricultural land/farmhouse/plantation – NO. This is strictly prohibited.
• Money – Yes, through authorized banking channels
• Shares – Yes, with conditions

This is the key restriction many NRIs miss. You CANNOT gift agricultural land to another NRI. Only to a resident Indian.

Quick Reference: What NRIs Can and Cannot Receive as Gifts

Asset Type	From Resident Indian	From Another NRI
Residential property	Yes	Yes
Commercial property	Yes	Yes
Agricultural land	Yes (from relative)	No
Farmhouse	Yes (from relative)	No
Plantation property	Yes (from relative)	No
Money (INR)	Yes (up to $250K/year LRS)	Yes
Shares/securities	Yes (with conditions)	Yes (with conditions)
Jewellery/valuables	Yes	Yes

FEMA violation penalties: Up to 3 times the transaction value, or ₹2 lakh, whichever is higher. Don’t take shortcuts.

Tax Implications: The Part Everyone Worries About

Gift taxation in India depends on two factors: the relationship between donor and donee, and the value of the gift.

Gifts from Relatives – Tax-Free

Under Section 56(2)(x) of the Income Tax Act, gifts received from “relatives” are completely exempt from income tax. No limit on amount.

Who qualifies as a “relative” under Income Tax Act?

The definition is wider than FEMA:

• Spouse
• Brother or sister (including step-siblings)
• Brother or sister of spouse
• Brother or sister of either parent
• Any lineal ascendant or descendant (parents, grandparents, children, grandchildren)
• Any lineal ascendant or descendant of spouse
• Spouse of any of the above persons

So gifts from parents, children, siblings, grandparents, in-laws, uncles, aunts – all tax-free. Regardless of amount.

Father gifting a ₹2 crore house to his NRI son? Tax-free.

Mother transferring ₹50 lakh to her NRI daughter’s NRO account? Tax-free.

If you’re unclear on NRI definitions, our guide on who qualifies as an NRI explains the nuances.

Gifts from Non-Relatives – Tax Rules Apply

If the gift is from a non-relative (friend, business associate, unrelated person):

• Cash/money: Gifts up to ₹50,000 in a financial year are tax-free. Above ₹50,000, the entire amount is taxable as “Income from Other Sources” at your slab rate.
• Immovable property: If the stamp duty value exceeds ₹50,000, the stamp duty value is taxable in the donee’s hands.
• Movable property: If aggregate value exceeds ₹50,000, the fair market value is taxable.

Important: These thresholds are per financial year, aggregated across all gifts from all non-relatives.

Special Tax Situations

Marriage gifts: Gifts received on the occasion of marriage are fully tax-free, regardless of who gives them and regardless of amount.

Inheritance/Will: Assets received through a will or by inheritance are completely tax-free. No income tax, no gift tax.

Clubbing provisions (Section 64): If you gift money or assets to your spouse or minor child, and they earn income from those assets, that income is “clubbed” (added back) to your income for tax purposes. This is a common trap in gift-based tax planning.

Capital gains on gifted property: When the donee eventually sells a gifted property, capital gains tax applies. The cost of acquisition is what the original owner paid (not the gift date value).

The holding period includes the previous owner’s holding period.

For detailed tax rules, see our capital gains guide.

Stamp Duty: State-by-State Costs

Stamp duty on gift deeds varies significantly by state. And the biggest factor? Whether the gift is between blood relatives or not.

State-Wise Stamp Duty on Gift Deeds (2026)

State	Blood Relatives	Non-Relatives
Maharashtra	₹200 (flat, regardless of value)	3-6% of market value
Karnataka	₹1,000-₹5,000 (concessional)	5.6% of market value
Tamil Nadu	1% of market value	7% of market value
Delhi	Varies (concessional for family)	4-6% of market value
Uttar Pradesh	₹5,000 (concessional for blood relatives)	7% of market value
Rajasthan	2.5% (family); wife exempt	4-5% of market value
Kerala	Concessional rates for family	5% of market value
Telangana	Concessional for blood relatives	4% of market value
Gujarat	Concessional for family	4.9% of market value
Madhya Pradesh	1% for family	5% of market value
West Bengal	Concessional for family	5-7% of market value

Notes:

• “Market value” means the higher of declared value or circle rate/ready reckoner rate
• “Blood relatives” definition varies by state but typically includes spouse, children, parents, siblings, grandchildren
• Registration charges (typically 1% of property value) are additional
• Rates change periodically – verify with local sub-registrar before proceeding

The Maharashtra advantage: If you’re gifting property to a blood relative in Maharashtra, the stamp duty is just ₹200 regardless of property value. A ₹5 crore property? ₹200 stamp duty.

This makes Maharashtra one of the most gift-deed-friendly states in India.

Who Pays the Stamp Duty?

The donor (giver) pays the stamp duty. If the donee pays, the transaction may not qualify as a “gift” and could be treated as a sale.

Documents Required for an NRI Gift Deed

Keep these ready before starting the process.

For the NRI (whether donor or donee):

• Valid passport (Indian passport if NRI, foreign passport if OCI)
• OCI card (if applicable)
• PAN card (mandatory for property transactions)
• Overseas address proof
• Indian address proof (if available)
• Passport-size photographs

Property-related documents:

• Original title deed / sale deed of the property
• Encumbrance certificate (EC) from Sub-Registrar’s office (last 30 years recommended)
• Latest property tax receipts
• Approved building plan (for constructed property)
• Khata certificate/extract (Karnataka) or equivalent
• Survey sketch / property map
• Previous chain of title documents
• No-objection certificate from housing society (if applicable)

Relationship proof:

• Birth certificate (for parent-child relationship)
• Marriage certificate (for spouse)
• Family tree / genealogy document
• Aadhaar cards showing family connections

Power of Attorney (if NRI is abroad):

• General or Special Power of Attorney executed on stamp paper
• Notarized in the country of residence
• Apostilled (for Hague Convention countries like the US, UK) or attested by Indian Embassy/Consulate
• Registered at Sub-Registrar’s office in India

Step-by-Step Registration Process

Here’s how to register a gift deed in India.

If the NRI is Present in India

Step 1: Draft the gift deed

Engage a lawyer familiar with NRI property transactions. The gift deed must include:

• Full names, addresses, ages of both donor and donee
• Relationship between donor and donee
• Detailed description of the property (survey number, boundaries, area, address)
• Declaration that the gift is voluntary and without consideration
• Statement that the donor is of sound mind
• Date and place of execution
• Witnesses’ details (minimum two witnesses required)

Step 2: Purchase stamp paper

Buy non-judicial stamp paper of the value applicable in your state. For blood relatives in Maharashtra, this is just ₹200. For non-relatives, it could be lakhs.

You can also pay stamp duty online through e-stamping in many states.

Step 3: Execute the gift deed

Both donor and donee sign all pages of the deed in the presence of two witnesses. Witnesses also sign.

Step 4: Register at the Sub-Registrar’s office

Both parties (or their POA holders) visit the Sub-Registrar’s office in the jurisdiction where the property is located.

Submit:

• Executed gift deed
• All property documents
• ID proofs of both parties
• Relationship proof
• Photographs
• Registration fee (typically 1% of property value)

Biometric verification (fingerprint/photo) is done at the office.

Step 5: Collect the registered gift deed

The Sub-Registrar stamps the deed and returns the registered copy. This process takes 1-4 weeks depending on the state.

Step 6: Mutation of property records

After registration, apply for mutation (name change) in local municipal/revenue records. This updates the property ownership in government records and is essential for future transactions.

Total timeline: 2-6 weeks if all documents are in order.

If the NRI is Abroad (Using Power of Attorney)

Many NRIs cannot travel to India for the registration. Here’s how to handle it.

Step 1: Execute a Special Power of Attorney (SPA)

Draft an SPA specifically authorizing the POA holder to execute and register the gift deed on your behalf.

Get the SPA:

• Notarized by a Notary Public in your country of residence
• Apostilled (if your country is a Hague Convention member – US, UK, Australia, etc.)
• OR attested by the Indian Embassy/Consulate (for non-Hague countries)

Step 2: Register the POA in India

The POA must be stamped and registered at the Sub-Registrar’s office in India within 3 months of execution. Your trusted person in India (the POA holder) handles this.

Step 3: POA holder executes the gift deed on your behalf

The POA holder signs the gift deed, appears at the Sub-Registrar’s office, and completes the registration process.

Important caution about POA:

Use a Special POA (limited to this specific transaction) rather than a General POA. General POAs give broad powers that can be misused. In our community, we’ve heard too many stories of POA abuse.

Only appoint someone you trust completely – a parent, spouse, or sibling. Never a distant relative, friend, or agent you don’t know well.

Gift Deed for Different Types of Assets

Gifting Money

NRIs can gift money to relatives in India through bank transfer. No gift deed is technically required for cash gifts, but it’s strongly recommended to:

• Create a gift deed (even for money) to document the transaction
• Transfer through banking channels (NRE/NRO to recipient’s bank account)
• Keep bank statements as proof

For money transfers to India, the process is straightforward. The gift deed serves as documentation to avoid questions from the Income Tax department later.

Under LRS, a resident Indian can gift up to $250,000 per financial year to an NRI. The money must go to the NRI’s NRO account.

Gifting Immovable Property (House, Flat, Land)

This is the most common NRI gift deed scenario. Mandatory registration at the Sub-Registrar’s office.

Key points:

• Property must be in India
• Stamp duty and registration charges apply
• Property mutation must be done after registration
• Encumbrance check is essential before accepting the gift

If the property has a home loan, the loan must be cleared before gifting, OR the donee must agree to take over the loan (with lender’s approval).

Gifting Shares and Securities

NRIs can gift shares of Indian companies to relatives.

Conditions:

• Gift must not exceed 5% of paid-up capital of the company
• Sectoral caps under FEMA must not be breached
• The NRI must be eligible to hold such securities
• If shares were purchased from NRE account, RBI approval may be needed
• Report the transfer on the FIRMS portal

For stock investments and demat account details, see our dedicated guide.

Gifting Jewellery and Valuables

No gift deed registration is legally required for movable property. But documentation is strongly recommended.

Create a simple gift deed on stamp paper describing the items, their approximate value, and the relationship between donor and donee. Keep photographs of items and any purchase receipts.

This protects both parties if the Income Tax department questions the source of assets.

Common NRI Gift Deed Scenarios

Based on conversations in our community, here are the scenarios that come up most often.

Scenario 1: Parents Gifting Property to NRI Child

The most common scenario. Indian parents want to transfer their house or flat to their NRI son or daughter.

• Fully permitted under FEMA (residential/commercial property)
• Tax-free for both parties (parent-child = relatives under IT Act)
• Stamp duty: Concessional in most states (₹200 in Maharashtra)
• Registration mandatory

Community tip: If parents have multiple children and want to gift to just one, get a No Objection Certificate (NOC) from other siblings. This isn’t legally mandatory, but it prevents disputes later.

Scenario 2: NRI Gifting Money to Parents in India

Very common – NRIs sending money to parents as a gift.

• Create a gift deed documenting the transfer
• Transfer from NRE/NRO account to parents’ bank account
• Tax-free (NRI child to parent = relatives)
• No registration needed for money gifts
• Keep bank statements as proof

Important: If parents invest this money and earn income, that income is taxable in the parents’ hands, NOT the NRI’s. Clubbing provisions don’t apply for gifts to parents.

Scenario 3: NRI Gifting Property to Spouse

NRIs sometimes transfer Indian property to their resident Indian spouse.

• Fully permitted
• Tax-free (spouse = relative)
• Stamp duty: Concessional/exempt in many states
• Clubbing alert: If the spouse earns rental income from this property, that income gets clubbed in the NRI’s tax return

This is a major tax planning consideration. Gifting property to your spouse doesn’t save tax on rental income.

Scenario 4: NRI Receiving Inherited Property, Then Gifting It

An NRI inherits property from a parent, then wants to gift it to a sibling.

• Inheritance: Tax-free, no gift deed needed
• Gifting inherited property to sibling (resident Indian): Permitted
• Gifting to another NRI sibling: Permitted for residential/commercial, NOT for agricultural land
• Capital gains: No capital gains at the time of gift. But when the ultimate owner sells, capital gains apply based on original cost

For the full picture on selling inherited property, check our detailed guide.

Scenario 5: OCI Holder Receiving Property Gift

OCI holders can receive gifts of residential and commercial property from resident Indians who are relatives.

• Same FEMA rules as NRIs apply to OCI holders
• Cannot receive agricultural land as a gift from another NRI/OCI
• CAN receive agricultural land as a gift from a resident Indian relative
• Must have PAN card for property transactions

For everything about OCI card rights, see our dedicated guide.

Common Mistakes to Avoid

Based on years of community experience, here are the errors NRIs make most often with gift deeds.

Mistake 1: Not registering the gift deed

An unregistered gift deed for immovable property has ZERO legal validity. It cannot be used as evidence in court. Always register.

Mistake 2: Using a General POA instead of Special POA

General POAs give the holder broad powers over all your assets. Use a Special POA limited to the specific gift deed transaction. This protects you from potential misuse.

Mistake 3: Not checking for encumbrances

Before accepting a property gift, always get an Encumbrance Certificate from the Sub-Registrar’s office. This reveals any loans, mortgages, or legal claims on the property.

Mistake 4: Ignoring stamp duty rules

Underpaying or not paying stamp duty makes the gift deed legally questionable. The authorities can demand the shortfall plus penalty later.

Mistake 5: Not doing property mutation after registration

Registration transfers legal ownership. But mutation updates the property in municipal/revenue records. Without mutation, you may face issues with property tax, future sales, and government services.

Mistake 6: Forgetting the FEMA restrictions on agricultural land

NRIs gifting agricultural land to other NRIs is prohibited. This violation can attract penalties up to 3x the property value.

Mistake 7: Not maintaining documentation for cash gifts

Many NRIs transfer large amounts to family without any documentation. If the Income Tax department asks questions later, you’ll need proof that it was a gift from a relative. Always create a simple gift deed and keep bank transfer records.

Mistake 8: Gifting property with unclear title

If the property has disputed ownership or missing title documents, the gift deed creates more problems than it solves. Verify title thoroughly before proceeding.

Can a Gift Deed Be Revoked?

Generally, no. A registered gift deed is irrevocable.

But there are limited legal grounds for revocation:

• Fraud: The gift was obtained through deception
• Coercion/Undue influence: The donor was forced or pressured
• Conditional gift: The deed specified conditions that the donee failed to meet
• Mutual agreement: Both parties agree to cancel (requires a new registered deed)

Courts have upheld gift deeds even when families later had disputes. Once you register a gift deed, assume it’s permanent.

Community advice: Think very carefully before executing a gift deed. Unlike a will, you can’t change your mind. If you’re unsure, use a will instead.

Repatriation of Sale Proceeds from Gifted Property

If an NRI receives a property as a gift and later sells it, the sale proceeds can be repatriated abroad.

Rules:

• Maximum $1 million per financial year from NRO account
• Applicable capital gains tax must be paid first
• Form 15CA (self-declaration) and Form 15CB (CA certificate) required
• TDS will be deducted by the buyer at time of sale
• You can apply for a lower TDS certificate under Section 197

Holding period for capital gains:

When calculating whether the gain is long-term or short-term, the holding period of the previous owner (who gifted the property) is included. So if your father held the property for 10 years before gifting it to you, it’s already long-term from Day 1 in your hands.

For understanding TDS rules and how they apply to NRI property transactions, check our guide.

Quick FAQ

Q: Is there a limit on how much property an NRI can receive as a gift?

No. There’s no limit on the value or number of residential/commercial properties an NRI can receive as gifts. FEMA only restricts the type (no agricultural land from other NRIs).

Q: Can an NRI gift property to a non-relative?

Yes, but the donee will have to pay income tax on the stamp duty value of the property if it exceeds ₹50,000. Also, concessional stamp duty (for blood relatives) won’t apply.

Q: Can a gift deed be executed from abroad without visiting India?

Yes, through a registered Power of Attorney. The NRI executes the POA abroad (notarized + apostilled/attested), the POA is registered in India, and the POA holder completes the gift deed process.

Q: Is stamp duty paid by the donor or the donee?

The donor pays stamp duty. If the donee pays, it may not qualify as a “gift” and could be treated as a sale transaction.

Q: Can parents gift property to a married daughter?

Absolutely. Under both Hindu Succession Act and Income Tax Act, daughters have equal rights. Gift to a daughter (married or unmarried) is tax-free and fully permitted.

Q: Do I need to pay capital gains tax when gifting property?

No. Gifting property does not trigger capital gains tax. Capital gains arise only when the property is eventually sold.

Q: Can an NRI gift property bought with NRE funds?

Yes. Residential/commercial property purchased with NRE/FCNR funds can be gifted. Repatriation rules for the donee depend on whether they’re NRI or resident.

Q: Is there a time limit for registering a gift deed?

The gift deed should ideally be registered as soon as it’s executed. Most states require registration within 4 months of execution. Delayed registration may attract penalties.

Q: Can a gift deed be used to avoid inheritance disputes?

Yes, and this is one of the main reasons NRIs use gift deeds. A properly executed and registered gift deed is much harder to contest than a will.

Q: Does the NRI need Aadhaar for a gift deed?

Aadhaar is increasingly used for property registration in India, but it’s not mandatory for NRIs. PAN card and passport are the primary documents.

My Practical Advice

Gift deeds are powerful tools for NRI estate planning. But they require careful thought.

Before executing a gift deed, ask yourself:

1. Am I sure I want to transfer ownership permanently?
2. Is the relationship solid enough that this won’t cause family problems?
3. Have I checked the property title thoroughly?
4. Do I understand the stamp duty cost in my state?
5. Have I consulted a lawyer who understands both FEMA and Indian property law?

If the answer to all five is yes, go ahead.

If you’re even slightly unsure about #1 or #2, consider a will instead. A will gives you all the flexibility of changing your mind while ensuring your assets go where you want after your lifetime.

One more thing. Always use a lawyer who has experience with NRI property transactions. The intersection of FEMA, Income Tax, state registration laws, and property law is complex enough that a general lawyer may miss important details.

Our community has a network of lawyers, CAs, and financial advisors across major Indian cities who regularly handle NRI cases. Join our group to connect with them.

Disclaimer: This guide is for informational purposes only. It is not legal or tax advice. Property laws, stamp duty rates, and FEMA regulations are subject to change. State-specific rules may vary. Always consult a qualified lawyer and chartered accountant before executing a gift deed. Verify the latest regulations with the relevant Sub-Registrar’s office and FEMA authorities before proceeding.

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If you’re navigating property decisions in India and want real-world guidance from people who’ve been through it, join our WhatsApp community at https://backtoindia.com/groups – 20,000+ NRIs helping each other with real, lived experience. It’s free and volunteer-run.