Sending money to parent to India and tax implications
I am a US citizen and would like to send $100k to my parents in India .. are there any tax implications for either me or my parents India ? Any help is appreciated.
In US, gift tax is payed by person giving it. But there are exemptions (18k per year per person and another 18k from your wife). So you can give 18k to your father and 18k to your mother. Same can be done from your wife. So a total of 72k can be done in a year without any reporting. If you want to go beyond it, then you will have to report it in your tax filling but still no tax. This addition will count towards your life time exemption. If possible send 72k this year rest next year. This 18k limit is per year per person In India tax is paid by receiving party, but there is no tax on transferring to anyone in your blood relation (father/ mother/brother/sister etc), so no issues for your father/mother in receiving it.
Would you need to report to IRS if more than the $18k per person limit but still less than lifetime transfer limit
Would you need to report if you send say $15k to 4 family members .. within the reporting limit for each member
No reporting required in this case. You can give 100 random people(even unrelated to you) 18k each and no reporting is required. But from India perspective, there can be tax implications if these 100 people are not your blood relatives
As long as you send through NRE or legitimate banking channels, no issues as long as you paid taxes in US and maintain paper trail in India. India doesn't tax foreign exchange receipts among family members. If it is for investment purposes and need repatriation, keep it in your name and let your parents operate it.