Blog-RemitForex

foot
unimoni-logo-155x85

Sending Happiness as money in time of need

Do you know these things about sending Money for gift purposes?

Gifting Money to your loved ones is the best way to express your love for them. It doesn’t matter if it is a large or small amount; gifting someone in need is always special. By blessing, you are giving someone peace of mind. 

Money gifts help millions of individuals pay for products and services every year. It improves conditions of life and significantly impacts those who receive it. In the past, giving someone money nearly always required a personal visit. But these days, it’s simple to send gifts to loved ones without being constrained by boundaries like borders and currencies, thanks to online gift-giving platforms, e-commerce, and digital money transfer services. 

This blog is about sending Money as gifts, the purpose, how much you can send etc.

What is a Gift Remittance?

A gift remittance is when an Indian citizen is allowed to send a gift to a recipient who lives outside of India. However, a resident cannot credit another resident’s foreign currency account maintained in a foreign country under LRS by giving them a present in that currency (Liberalized Remittance Scheme).

Who can make the Gift Remittance?

The gift money can be given only by a resident person. HUF, partnership firm, company, trust, any group of people gathered together, the body of people or artificial juridical person is not permitted to benefit from remittance under this programme. Given that “gift” is personal, it should be given to an individual rather than to a business or oneself.

How much Money can you gift someone?

When giving Money, many parameters must be considered. Thus, regular research may be needed because the situation may change. In the US, As long as the recipient isn’t making money off the present, you can give them as much money as you like tax-free in the United States.

In India, Resident individuals can remit a maximum of $250,000 abroad in a financial year under the ‘Gift Remittance’ category to their close relatives.

How can you gift Money?

Gifting Money to your loved ones quickly and securely is important. You can send Money in different forms like:

  • Cash: Gifting Money in cash is the oldest and never-out method of sending your love. It is just sending Money as per the guidelines of RBI.

  • Gift Cards: Money can be gifted in a tried-and-true fashion with gift cards. You can send someone a gift card to a restaurant or store they like if you know them well enough. Gift cards from Visa and Amazon are also a good option if you’re unsure.

  • Certificate of Deposits: A terrific gift is a CD that keeps improving over time. Even better, CDs can be used to teach young people—children, teenagers, and adults—the value of conserving Money. 

Gifting Money to Minors

Gifting Money to a minor is one of the most significant issues today. You have to consider many factors before sending gifts to minors. Sending them cash is the most convenient way, but it involves an element of risk as they will spend it just on unwanted accessories or games. So considering some essential things before sending Money to minors is worth it. 

  • A Custodial Account: It is an account in which you can add a beneficiary to save assets until they come of age. Whoever sets the Account will be the custodian of the Account. They can also manage the Account. When the minor reaches age, they can gain the amount/asset. 

  • A Trust Fund: A Trust Fund is a legal entity which can hold assets. It appoints a neutral entity which acts as a third party. This Account can hold stock, bonds, real estate etc. 

Gift money Taxes

Every Country has its taxation policy on tax money. Investing in gifting Money reduces your tax amount. 

Gifts received by anyone over Rs 50,000 are subject to taxation under the “income from other sources” category in India. There are unique exclusions for grants to certain close relatives, such as parents and children.

You should be aware that any money donated to family members, such as parents, children (except minors), and in-laws, can result in tax-free income and lower your overall tax bill. The Money you want to gift to your parents or parents-in-law should preferably be put in tax-exempt securities.

Any investment in your parents’ or kids’ names can result in tax savings or even tax-free online income. There are numerous options to invest Money or give it to your parents or parents-in-law to reduce your tax obligation.

Gift Money Tax Exemptions

Gift money is Money gifted to someone other than their dependant or spouse. Taxes are always levied on the donor and not the receiver unless he uses it as income. 

Not all gifts are taxed. Some are, of course, exempted from tax! They are:

  • Educational Fees

  • Charitable Funds and Donations

  • Political Contribution and Donations

  • Medical Expenses

  • Grant to Spouses and Dependants

Tips to avoid Gift Money Taxes

Everyone can avoid Gift taxes in some way or another. All you have to remember are some points while gifting Money.

  • Know the Tax limits: Always know the tax limits set by IRS. You can gift your loved ones $ 15,000/year without paying tax. Above this amount will be taxed.

  • Split the Gift: Split your Gift money so it will not be taxed per financial year. By this, you can maximize the amount and reduce the overall taxes.

  • Medical expenses: Paying directly to the medical institution or the insurance provider can instantly cover the medical costs and gives you some tax limits. 

  • Educational Expenses: Providing gift money for educational purposes will be limited to taxes. The donor pays directly to cover the tuition; other related fees will not count for tax payments. 

  • Leverage marriage in giving taxes: Surprisingly, married couples receive equal treatment regarding the gift tax threshold. Whether or whether a couple files their taxes jointly, the gifts each spouse gives or receives will be treated separately from those of the other spouse.

Epilogue

The sum of money you can legally give to a family member or someone you care about without paying taxes is gift money.

You may wish to give money to family members for various reasons. Particularly when it comes to children, the assets you create for them now will provide them with a significant financial edge down the road—and with the inflation rate rising, they might need it.

By making an early contribution to an account, you may be assisting them in paying for anything from a gap year abroad to their college tuition. Whatever the situation, there are numerous approaches to donating money to a family member.

Related Articles

Turkey Announces Scholarships for Indian Students: Check Important Dates, Eligibility and Other Details- Part I Turkey is an attractive option for international students seeking a fulfilling and transformative educational experience.…
unimoniit | February 3, 2024
Canada Announces Two-Year Cap on International Students. How will it Affect Indians?…
unimoniit | January 31, 2024
Why move to Mexico? Everything You Need to Know about Travelling, Living,…
unimoniit | January 19, 2024