I am an Indian Citizen. My daughter is working in USA ON L1 Visa. She is in the process of purchasing a House in USA (CA). Since she is running short of money I wish to Gift her Rs 3,000,000, roughly about 45,000 USD to enable her to go for a better house. My money is all tax paid. I will follow legal means to transfer the amount by easiest, cheapest and fastest means. Please advise the best means.

Will my daughter or I be liable for any tax on the transacted amount?

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    There should be no tax liability on the US side of things for either you or your daughter (you'd need to gift several million USD before this would become an issue). Not sure about tax rules on the India side of things, so not posting this as an answer. Also her mortgage provider may want to see a gift letter from you, accompanying the funds, to ensure the sudden influx of funds in her account is not repayable at any point. – CactusCake May 7 '18 at 14:57
  • @CactusCake I think your comment + information on whatever filings may be required given the annual limit is exceeded [thereby stating that you are drawing down against your lifetime exemption] would make this a perfect answer. – Grade 'Eh' Bacon May 7 '18 at 15:09

Will my daughter or I be liable for any tax on the transacted amount?

From India tax point of view, you are Resident Indian; your daughter Non Resident Indian. This would be treated as Gift from India taxation. There is no tax liability in India for you or your daughter. Under the liberalized remittance scheme you can transfer upto 250K outside of India without much paperwork. Please check with you bank.

In US the Gift tax is on donor. From US tax point of view, your daughter maybe resident Alien [US tax resident]. There is no tax implication in US for your daughter; there will be some reporting requirement if she is receiving gift in excess of 100K, which is not the case. As you are not US tax resident; The US tax laws are not applicable to you.

easiest, cheapest and fastest means. Please advise the best means.

Recommending Banks / products is off topic on this site.

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    "There is no tax implication in US for your daughter." There would be reporting implications for the daughter if the gift is more than $100,000, though it doesn't sound like it is in this case. – user102008 May 28 '18 at 4:30
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    "The US tax laws are not applicable to you." It would if the gift assets were located in the US, though it doesn't sound like it is in this case. – user102008 May 28 '18 at 4:30

If you have already paid taxes in India then you might able to do it. There is a tax treaty between India and USA thats lets you do it. Lot of Indians who work here in America they transfer money to India all the time without tax implications because they have already paid tax in USA.

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  • 'might' is not a very valuable factor in a tax answer; gut instinct is often wrong when it comes to tax, so good answers should have sourced information directly applicable to the OP, not answering by similar anequedote. – Grade 'Eh' Bacon May 7 '18 at 15:53
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    the tax treaty is totally, completely, irrelevant here. – Fattie May 7 '18 at 16:48

Under US tax law, a person can receive a gift of up to $15,000 from another person, without any tax liability. Its common in the US for parents to gift money to children this way - each parent can gift $15,000 for a total of $30,000 in a single tax year. The amount above that would be subject to taxes. There are lifetime limits as well, but if this is a one-time thing that should not come into play here. I do not know if your Indian citizenship makes a difference or not, I tend to think it would not.

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    The US IRS 2018 gift tax exclusion is $15,000 per person.. See the entry under Exclusions. – Peter K. May 7 '18 at 15:13
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    Also, without a tie-in to how this fits with amounts above exclusions [up to your lifetime exemption limit] this is only part of a complete answer, and is somewhat misleading. – Grade 'Eh' Bacon May 7 '18 at 15:52
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    Almost right. If the gift goes above the annual limit it has to be reported, but it may still be tax-free unless the donor exceeds (or had already exceeded) their lifetime limit of $5.6m per individual. – CactusCake May 7 '18 at 17:16
  • @CactusCake $10M+/per as of 2018 – Hart CO May 7 '18 at 17:31
  • Interesting, so really in effect, there is no limit other than the lifetime limit? Its all just reporting required? – Norm May 7 '18 at 19:04

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