Do you pay tax on money sent from the UK to India?
Usually not. Neither country taxes the transfer itself, and gifts to close relatives in India are tax-free for them. Tax can arise in two situations: UK inheritance tax on large gifts if you die within 7 years, and Indian income tax for anyone who receives large gifts from people who aren't relatives. This guide explains both. It is general information, not tax advice.
Written by Sonic Wallet editorial team · Last reviewed: 1 November 2026
Key facts
- Neither the UK nor India taxes the act of sending money from the UK to India.
- Gifts from relatives are tax-free for the recipient in India, whatever the amount.
- Gifts from non-relatives are taxable for the recipient once they add up to more than ₹50,000 in a financial year, and then the whole amount is taxed.
- UK inheritance tax can apply to gifts made in the 7 years before your death, unless an exemption covers them.
- Each tax year you can give away £3,000 free of inheritance tax, plus regular gifts out of your income and small gifts of up to £250 per person.
Is money sent from the UK to India taxed?
No tax is charged on the transfer itself, in either country. What matters is whose money it is and why you are sending it: moving your own savings to your own account in India is not income, and money you give to family is treated as a gift.
Interest that money then earns in India can be taxable, depending on the account. Our guide to NRE and NRO accounts explains the difference.
Does the recipient in India pay tax on money from the UK?
Not if the money is a gift from a relative: under Indian income tax rules, gifts from relatives are tax-free whatever the amount. Gifts from anyone else, such as friends, are taxable for the recipient if they add up to more than ₹50,000 in a financial year (April to March). Above that threshold the whole amount is taxed, not just the part over ₹50,000.
For an individual, these people count as relatives:
- their spouse
- their brothers and sisters
- their spouse's brothers and sisters
- the brothers and sisters of either parent
- their parents, grandparents and other direct ancestors, and their children, grandchildren and other direct descendants
- the same direct ancestors and descendants of their spouse
- the spouses of everyone listed above, other than their own spouse
Money received on the occasion of the recipient's marriage, and money inherited under a will, are also tax-free in India.
Do you pay UK inheritance tax on money you send to India?
Only if you die within 7 years of the gift and no exemption covers it. Gifts made in the 7 years before your death count towards your estate, and inheritance tax is charged on the part of the estate above the £325,000 tax-free threshold.
| Allowance | How much |
|---|---|
| Annual exemption | £3,000 in total each tax year (6 April to 5 April). Unused allowance can be carried forward for one tax year. |
| Small gifts | Up to £250 per person, to as many people as you like, as long as you haven't used another allowance on them. |
| Wedding gifts | £5,000 to a child, £2,500 to a grandchild or great-grandchild, or £1,000 to anyone else. |
| Regular gifts out of income | No limit, as long as you pay from your regular income and can still afford your usual living costs. |
Regular support for family in India often fits the last category: for example, a monthly payment towards an elderly parent's living costs, paid from your salary rather than your savings.
Keep a record of what you sent, who to and when. The person who deals with your estate will need it to work out whether any tax is due.
What is the 7-year rule?
A gift is free of inheritance tax if you live for 7 years after making it, unless it is part of a trust. If you die within 7 years and your gifts add up to more than the £325,000 threshold, gifts made 3 to 7 years before death are taxed at a reduced rate, known as taper relief.
| Years between gift and death | Rate of tax on the gift |
|---|---|
| Less than 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
Is interest earned in India taxed in the UK?
Normally yes, if you are UK tax resident: UK residents pay tax on foreign income, including savings interest from India, unless they are eligible for Foreign Income and Gains relief. You usually report it on a Self Assessment tax return.
In India, interest on an NRE account is tax-free while you live abroad, and interest on an NRO account is taxed. If both countries tax the same income, you may be able to claim relief so that you are not taxed twice.
Do you need to declare money you send to India?
Not for a transfer through a bank or a money transfer provider. The provider may ask where the money came from as part of its anti-money-laundering checks.
The £10,000 declaration rule applies only to cash you carry in person between Great Britain and a country outside the UK.
Sending money to India?
See how many rupees your family will receive, what it costs, how long it takes and the details you need.
Send money to IndiaFrequently asked questions
Do I pay tax on money I send to my parents in India?+
No tax is due on the transfer, and your parents pay no Indian tax on gifts from you, because parents count as relatives. In the UK, regular gifts paid out of your income are free of inheritance tax, as are gifts covered by the £3,000 annual exemption.
How much money can I gift to a relative in India tax-free?+
India has no limit on gifts from relatives. In the UK, any gift can count towards inheritance tax if you die within 7 years, unless an exemption such as the £3,000 annual exemption or regular gifts out of income applies.
Is money received from abroad taxable in India?+
Not if it is a gift from a relative, or your own money moved to your own account. Gifts from non-relatives are taxable for the recipient once they add up to more than ₹50,000 in a financial year.
Do I have to tell HMRC that I send money to India?+
Not for the transfer itself. If you are UK resident, you report foreign income such as interest from an Indian bank account, normally on a Self Assessment tax return.
Is NRE account interest tax-free?+
It is tax-free in India while you are resident outside India. If you are UK tax resident, it is normally taxable in the UK as foreign savings income.
Related guides
- NRE vs NRO accounts: which should you use?Tax, repatriation and what each account can receive, side by side.
- How much money can you send to India from the UK?UK and Indian rules, provider limits and the cap on cash-collection transfers.
- The cheapest way to send money from the UK to IndiaWhy the fee is only half the cost, how to compare providers and what the average transfer costs.
- What bank details do you need to send money to India?IFSC codes, account numbers, UPI IDs and when you need a SWIFT code.
Useful tools and pages
Sources
- Inheritance Tax: rules on giving gifts, GOV.UK
- How Inheritance Tax works: thresholds, rules and allowances, GOV.UK
- Tax on foreign income, GOV.UK
- Take cash in and out of the UK, GOV.UK
- Tax treatment of gifts received by an individual or HUF, Income Tax Department, Government of India
- Exempt income for non-residents, section 10(4)(ii), Income Tax Department, Government of India