Sending money from the US to India is common for NRIs (Non-Resident Indians), but the tax implications can be confusing. This guide covers what you need to know — in plain English.
Disclaimer: This is general information, not tax advice. Consult a tax professional for your specific situation.
US Side: Is Money I Send to India Taxable?
No, remittances are not taxable in the US. Sending your own money to family in India is not a taxable event. You've already paid income tax on the money when you earned it. Transferring it internationally doesn't trigger additional US taxes.
Gift Tax Rules
If you're gifting money to someone in India (not paying for services), US gift tax rules apply:
- Annual exclusion (2026): You can gift up to $18,000 per person without filing anything
- Above the exclusion: You must file Form 709 (Gift Tax Return), but you likely won't owe tax — it just counts against your lifetime exclusion (~$13 million)
- The recipient in India does not owe US taxes on gifts received
FBAR (Foreign Bank Account Report)
If you have financial accounts in India (NRE, NRO accounts) with a combined balance exceeding $10,000 at any point during the year, you must file FinCEN Form 114 (FBAR) by April 15.
- This is a reporting requirement, not a tax
- Penalties for non-filing can be severe ($10,000+ per violation)
- File electronically through the BSA E-Filing System
FATCA (Form 8938)
Under FATCA, if your foreign financial assets exceed certain thresholds, you must report them on IRS Form 8938:
- Single filers: $50,000 at year-end or $75,000 at any point
- Married filing jointly: $100,000 at year-end or $150,000 at any point
This overlaps with FBAR but they are separate requirements — you may need to file both.
India Side: Tax on Money Received
For your recipients in India:
- Gifts from relatives: Not taxable under Indian tax law, regardless of amount. "Relatives" includes a broad list (parents, siblings, spouse, children, etc.)
- Gifts from non-relatives: If the total gifts received in a financial year exceed ₹50,000, the entire amount is taxable as income
- Maintenance payments: Regular payments for family support are generally not taxable
RBI Liberalized Remittance Scheme (LRS)
The LRS is India's framework for outbound remittances from India. It limits Indian residents to sending up to $250,000 per financial year abroad. This doesn't affect inbound remittances from the US — there is no limit on how much money can be sent to India.
Best Practices
- Keep records: Save receipts and confirmations for every transfer
- Use traceable methods: Bank transfers and services like Pym create clear documentation trails
- File FBAR if required: Don't skip this — penalties are serious
- Consult a CPA: If you send large amounts regularly, a tax professional familiar with NRI issues is worth the investment
How Pym Helps
Every transfer through Pym generates detailed records including amount, exchange rate, recipient details, and transaction ID — making tax documentation straightforward. Sign up free and send with $0 fees on bank transfers and crypto.