NRI Tax Indi: Indian tax law outlines which relatives can exchange gifts without triggering tax consequences.

I live and work in France with my wife. Recently, after we hosted her cousin's family during their trip to France, her cousin wanted to send her money as a gift via wire transfer. Would this gift affect my wife’s tax obligations in India?

• Name withheld upon request

According to foreign exchange regulations, your wife’s cousin is allowed to transfer money as a gift to your wife’s account in France.

Indian tax law specifies certain relatives who can exchange gifts without incurring taxes. These relatives include a husband, wife, sibling, or any direct ancestor or descendant of the individual.

However, any gift exceeding ₹50,000 in a fiscal year is taxable in your wife’s name for the entire gift amount. It will be taxed as "Income from Other Sources." Additionally, the India-France Double Taxation Avoidance Agreement (DTAA) does not offer any exemption for this tax.

My tax consultant mistakenly listed me as a resident when filing my 2023-24 tax return. What should I do now?

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To ensure your tax return is accurate and you don’t miss out on tax benefits available to non-residents, you should correct your residential status.

The simplest solution is to file a revised return by December 31, 2024.

If you can’t meet this deadline, you still have options. For example, if you receive an intimation under Section 143(1), you can consider alternatives such as submitting a rectification application, appealing against the intimation, or requesting the Central Board of Direct Taxes to allow a delayed revised return, depending on the circumstances.

If correcting your status leads to additional tax liability, you can submit an updated return after paying the extra tax.