Archive · 18 Aug 2026
Gifting to Father's HUF: NRI Tax Rules and Refiling Explained
A man from India who lives in the UK asked if he has to pay tax when he gives money to his father's family fund, called a HUF.
The good news is that people who give gifts do not have to pay tax on the gift itself.
Normally, if a HUF receives money without giving anything back, that money could be treated as taxable income.
But there is a special rule: gifts from relatives are not taxed, and members of the HUF count as relatives.
So the father's HUF does not have to pay tax on the gift from the NRI member.
However, if the HUF invests the gifted money and earns income from it, that income is added to the member's own tax return.
The article also answers a question from an NRI in Singapore who filed a tax form called Form 41 with the wrong certificate.
Once Form 41 is submitted it cannot be changed directly, but the taxpayer can file it again online and the new filing becomes valid.
The article also explains that NRIs are people who do not meet the residency rules, like staying in India for 182 days or more.
Special exceptions in the rules may change how long certain visitors can stay before being treated as residents.
Gifts made by a person are not taxable for the giver, so an NRI gifting savings to his father's HUF incurs no tax on the gift itself.
Under the Income Tax Act 2025, money received by a HUF without consideration generally counts as 'Income from Other Sources,' but gifts from relatives, including HUF members, are exempt.
Investment income earned by the HUF from the gifted funds must be clubbed with the member's income and added to the member's taxable income.
Receiving gifts from NRIs is not currently restricted under foreign exchange laws, making such transfers straightforward.
Form 41 cannot be directly revised once submitted, but the e-filing portal allows resubmission, making the newly filed form valid from the date of refiling.
- Who
- An NRI living in the UK who gifted savings to his father's HUF, and a Singapore-based NRI consultant who filed Form 41 with the wrong Tax Residency Certificate, with answers provided by Mint Money.
- What
- Clarification of tax rules for gifts from NRI members to their father's HUF, correction options for Form 41, and NRI residential status rules.
- When
- No specific date given; the article references the Income Tax Act 2025, the Finance Act 2020 amendments effective from 2021-22, and a 2026 Tax Residency Certificate.
- Where
- India, with the two questioners based in the United Kingdom and Singapore.
- Why
- To help NRIs understand their tax obligations and compliance procedures when gifting funds to an HUF or correcting a tax filing.
- Gift tax for the giver
- Not taxable — gifts made by a person do not create tax liability for the giver.
- HUF taxation of gift
- Gifts from relatives, including HUF members, are exempt; otherwise treated as Income from Other Sources under the Income Tax Act 2025.
- Income from gifted funds
- Investment income earned by the HUF must be clubbed with the member's income.
- Foreign exchange rules
- Receiving gifts from NRIs is not currently restricted.
- Form 41 correction
- Cannot be directly revised; resubmission via the e-filing portal makes the original filing non-actionable.
- Residential status threshold
- Resident if 182 days in India, or 60 days plus 365 days across four preceding years.
- High-earner exception
- 60-day period extended to 120 days for those earning over ₹15 lakh excluding foreign income (from 2021-22).