Yes, but only to a relative who is also resident in India. Under FEMA, a resident individual can receive foreign securities, such as US stocks and ETFs, as a gift from a resident relative without any limit. Gifting them to someone who lives outside India, or to someone who is not your relative, is not permitted.
If the person you want to gift to does not qualify, you can still gift the value of your investments in other ways.
Table of contents
- Can you gift global stocks and ETFs to a relative in India?
- Can you gift global stocks and ETFs to someone living outside India?
- Do you pay US gift tax on gifted US stocks?
- Alternative ways to gift the value of global stocks and ETFs
Can you gift global stocks and ETFs to a relative in India?
Yes. Under Schedule III of the Foreign Exchange Management (Overseas Investment) Rules, 2022, a resident individual may acquire foreign securities by way of gift, without any limit, from a person resident in India who is a relative and who holds those securities in line with FEMA.
Relative here follows the Companies Act, 2013 definition, which covers your spouse, parents, children and their spouses, siblings, and members of your Hindu Undivided Family.
The shares move from your account into an account in your relative’s name, so your relative needs their own brokerage account to receive them.
On the Indian tax side, gifts received from specified relatives are exempt from tax for the person receiving them, under Section 92 of the Income-tax Act, 2025.
Note: Gifting shares to your spouse does not lower your tax bill. India’s clubbing rules add the income from assets gifted to a spouse back to the income of the person who gifted them.
Can you gift global stocks and ETFs to someone living outside India?
No. FEMA does not allow a resident individual to transfer foreign securities by way of gift to a person resident outside India. This applies even if the person is a close relative, such as a child studying or working in the US.
The same limit applies to gifts to someone in India who is not your relative, such as a friend. In both cases, you can gift money instead, using one of the alternatives below.
Do you pay US gift tax on gifted US stocks?
No. Under Section 2501(a)(2) of the US Internal Revenue Code, a non-resident who is not a US citizen pays US gift tax only on gifts of US real estate and tangible property located in the US. Shares of US companies and US-domiciled ETFs are intangible property, so gifting them does not attract US gift tax.
However, the shares remain US-situs assets in your relative’s hands. If their US-situs assets are worth more than $60,000 when they pass away, their estate can face US estate tax of up to 40%. Read how US estate tax works for Indians and NRIs for the full rules.
Alternative ways to gift the value of global stocks and ETFs
If a direct gift of the shares is not allowed, here are the alternatives Indian investors use:
1. Selling global stocks and ETFs and sending the money
You can sell the holdings, realise your gains (or losses), and gift the money. This results in a tax hit, as you pay capital gains tax in India on any profit when you sell.
- Sending the money to someone abroad as a gift counts towards your $250,000 LRS limit for the financial year.
- The LRS rules for gifts apply to this remittance. To learn more, read our guide on avoiding FEMA violations in gifts and donations (LRS rules).
2. Sending money directly
If you have enough liquid cash, you can send money directly from your bank account instead of selling your investments, which avoids the capital gains tax on a sale.
This is still subject to the LRS rules for gifts and the annual $250,000 limit.
3. Using joint accounts
If you want to share global stocks and ETFs with one specific person, such as your spouse, you can hold them in a joint account. To learn more about how these accounts work, read our guide on how joint global brokerage accounts are taxed.
About Paasa
Paasa is a global investing platform for Indian residents and NRIs. It gives you direct access to stocks on their home exchanges in the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore, along with ETFs and UCITS funds.
- One account for global markets: hold stocks, ETFs and UCITS funds across the US, Europe and Asia in an account in your own name.
- A dedicated relationship manager: one point of contact for questions about your account, including transfers and joint accounts.
- Tax reports in one place: capital gains, dividends and Schedule FA workings, ready for your return.
