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Does an NRI get taxed for gifting savings to his father's HUF? Does this fall under Income from Other Sources? Explained
Mint 7 hrs ago·18 Aug 2026, 1:51 pm
An NRI in the UK recently asked if gifting his savings to his father's Hindu Undivided Family (HUF) would be taxed. The short answer is that the HUF is treated as a separate taxable entity under the Income Tax Act. When an HUF receives a gift, it is considered unconsidered income, which is taxable unless it falls under specific exemptions. This means the HUF must include the gifted amount in its total income and pay tax accordingly.
This rule matters to investors because it clarifies how assets can be moved between family members. For NRIs, it highlights that a HUF is not a tax-saving tool for gifts from non-relatives. The tax liability depends on the HUF's total income and the applicable tax slab. Investors should ensure that any gifts to a HUF are properly documented to avoid disputes with tax authorities.
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