Gifting Property in India to or from an NRI or OCI: FEMA, Stamp Duty and Tax
A resident can gift a flat, house, plot, shop or office in India to an NRI or OCI without RBI approval, provided the receiver is a "relative" as the Companies Act defines it: spouse, parent, child, child's spouse or sibling. Farmland, farmhouses and plantations can't go to an NRI or OCI by gift at all. A gift to a relative is tax-free, and often costs little in stamp duty.
This page covers property located in India. For gifting a flat abroad, such as one in Dubai, see our guide to gifting a Dubai flat to family.
Key takeaways
- The FEMA rule on gifts (rule 24 of the Non-Debt Instruments Rules, 2019) uses the Companies Act definition of relative, which leaves out grandparents, grandchildren, uncles, aunts and cousins.
- An NRI or OCI can gift Indian property to anyone resident in India, and residential or commercial property to an NRI or OCI relative. Farmland they own can only go to a resident Indian.
- Income tax uses a wider list of relatives. A gift from one is exempt under section 92 of the Income-tax Act, 2025 (old section 56(2)(x)).
- A gift deed must be registered and attested by two witnesses, and accepted while the donor is alive. One signed abroad must be stamped within three months of reaching India.
- The receiver takes over the donor's cost and holding period when they later sell.
What FEMA allows, direction by direction
| Gift | Residential or commercial property | Farmland, farmhouse, plantation |
|---|---|---|
| Resident to NRI or OCI relative | Allowed | Not allowed |
| NRI or OCI to NRI or OCI relative | Allowed | Not allowed |
| NRI or OCI to a resident | Allowed | Allowed, to a resident Indian |
| Anyone to an NRI or OCI who is not a Companies Act relative | Needs RBI approval | Not allowed |
| Inheritance by an NRI or OCI | Allowed | Allowed |
The last row is the escape route families use. Farmland can't be gifted to an NRI child, but it can pass to them by will or on intestacy. Once inherited, it can be sold or gifted only to a resident Indian; see can an NRI buy agricultural land in India.
The narrow definition of relative
Section 2(77) of the Companies Act, 2013 and its rules cover husband and wife, members of the same Hindu undivided family, father, mother, son, daughter, son's wife, daughter's husband, brother and sister. A grandfather in Pune can't gift his flat to a grandson in Toronto under the general permission, even though the same gift would be tax-free. He can leave it by will, gift it to the grandson's resident parent, or apply to the RBI.
If the receiver holds an OCI card
An OCI receives property by gift on the same footing as an NRI. Buying is a separate question, covered in our guide for OCI cardholders buying property in India, including the extra RBI permission for passport holders of certain neighbouring countries.
Tax: usually nil, if you get the relationship right
Income tax treats property received free as income of the receiver when its stamp duty value is more than Rs 50,000, now under section 92 of the Income-tax Act, 2025. Gifts from a relative are exempt, and the tax law's list is wider than FEMA's: it includes brothers and sisters of you or your spouse, brothers and sisters of your parents, and any lineal ascendant or descendant, with their spouses.
So a grandparent's gift to a grandchild abroad is tax-free but blocked by FEMA, while a gift from a friend is taxable and blocked by FEMA. The donor pays no income tax on giving. A gift to a spouse is exempt too, but the rent it earns can be taxed back in the donor's hands under the clubbing rules, so it doesn't split income.
When the receiver sells
The receiver steps into the donor's shoes: the cost is what the previous owner paid, plus improvements, and the holding period includes the donor's years. A flat a mother bought in 2012 and gifted to her NRI son in 2026 is a long-term asset in his hands from the day of the gift. When he sells, the buyer will deduct TDS as for any NRI seller; our capital gains guide covers the tax.
Stamp duty on a family gift
Stamp duty is a state levy and doesn't care where the receiver lives. What matters is the relationship. Several states charge a small flat amount on gifts within the family:
| State | Gift to close family | Gift to others |
|---|---|---|
| Maharashtra | Rs 200 for residential or farmland to spouse, children, grandchildren or a son's widow | 3% of market value |
| Uttar Pradesh | Rs 5,000 for residential or farmland to listed family members | Full rate |
| Karnataka | Rs 1,000 to Rs 5,000, by location | 5% of market value |
| Tamil Nadu | 1% for blood relations | 7% |
| Jammu and Kashmir | Remitted for blood relatives | Full rate |
Registration fees and cesses come on top, and states revise these rules, so check the current notification. UP's concession, reissued on 3 August 2023, is lost if the receiver gifts the property on within five years. General rates by state are in our stamp duty and registration charges guide.
Worked example: a Rs 2 crore flat in Mumbai
A mother in Mumbai gifts her flat, with a market value of Rs 2 crore, to her son in Singapore.
| Item | To her son (relative) | To her nephew abroad |
|---|---|---|
| FEMA | General permission | RBI approval needed |
| Stamp duty | Rs 200 | Rs 6,00,000 (3%) |
| Income tax on receiver | Nil: relative | Rs 2 crore taxed as income at slab rates |
A brother's or sister's son is in neither list of relatives, so the nephew faces both an RBI application and tax on Rs 2 crore. For the son, the whole transfer costs Rs 200 in duty plus the registration fee and legal work.
Signing a gift deed from abroad
Either side may be overseas. The law on the deed itself doesn't change: under sections 122 and 123 of the Transfer of Property Act, a gift of immovable property needs a registered deed, signed by the donor and attested by at least two witnesses, and it must be accepted while the donor is alive. The receiver can accept through an attorney.
When the donor is abroad
- Draft the deed in India, with the property schedule and the donee's acceptance.
- Sign it before a notary abroad, then get it apostilled, or attested at the Indian consulate where the country isn't in the Hague convention; the UAE is the usual example.
- Send it to India and get it adjudicated and stamped within three months of its arrival, as the Stamp Act allows for documents signed abroad.
- Present it for registration. Under section 26 of the Registration Act, a deed executed abroad is accepted if presented within four months of arriving in India. An attorney can present it.
Sub-registrars vary on whether they'll register a deed signed abroad without the donor present, so ask the office first. Many families find it simpler for the donor to sign a power of attorney abroad and have the attorney sign the gift deed in India.
When the receiver is abroad
The resident donor signs in India in the usual way. The NRI accepts through a power of attorney holder or signs on the next visit, with passport, PAN and OCI card if relevant.
Gift deed or relinquishment deed?
If you and your NRI sibling already co-own a flat by inheritance, you don't need a gift deed to hand over your share: a relinquishment deed to an existing co-owner usually attracts lower duty. A release to anyone who isn't already a co-owner is treated as a gift. See our guide to the relinquishment deed. We found no clear FEMA position on a release of inherited farmland in favour of an NRI co-heir, so take advice there.
If you're weighing a gift now against leaving the property by will, our comparison of gift deed vs will covers the trade-offs, including that a registered gift is hard to undo.
Where these gifts go wrong
- Gifting to a grandchild or niece abroad. Tax-free is not the same as FEMA-permitted.
- Gifting farmland to an NRI child. Not allowed; use a will.
- A deed signed abroad that sits in a drawer. Miss the three-month stamping window and a penalty can follow.
- A gift to a spouse to split rent. Clubbing brings the rent back to the donor.
Frequently asked questions
Can my parents gift their flat in India to me if I am an NRI?
Yes. Parents and children are relatives under the Companies Act definition that FEMA uses, so no RBI approval is needed for a flat, house, shop or office. You pay no income tax on it, and states such as Maharashtra charge a small flat duty on a gift to a child. The only property they can't gift you is farmland, a farmhouse or a plantation.
Can a grandparent in India gift property to an NRI grandchild?
Not under the general FEMA permission, because grandchildren are not relatives under section 2(77) of the Companies Act. The gift would be tax-free under income tax rules, but FEMA needs RBI approval for it. Families usually leave the property to the grandchild by will, since inheritance is allowed, or gift it to the grandchild's resident parent.
Can an NRI gift Indian property to a resident brother?
Yes. An NRI or OCI can gift any Indian property to a person resident in India, including farmland they inherited, which can only go to a resident Indian. A brother is a relative for income tax, so he pays no tax on it. Stamp duty depends on the state and on whether it gives a family concession for siblings.
How long do I have to register a gift deed signed abroad?
Two clocks run from the day the deed arrives in India. It should be adjudicated and stamped within three months, and presented for registration within four months under section 26 of the Registration Act. Keep the courier receipt showing the arrival date, and don't sign the deed abroad until everything in India is ready.
Does the NRI who receives the gift pay tax when selling it later?
Yes, on the gain when they sell. Their cost is what the donor originally paid, and the donor's years of ownership count towards the holding period, so the gain can be large on an old family flat. As a non-resident seller, the buyer will deduct TDS on the sale price unless they first get a lower deduction certificate.
If you're planning to pass a family flat to a child or sibling abroad, the Realty Hunting team is happy to talk through the options before anything is signed.
