As an Indian resident, you must be aware that you can gift Indian stocks and ETFs to your friends and family.
Indians with globally diversified investment portfolios often wonder if it is also possible to gift global stocks and ETFs. This blog covers this key question, and the regulations that deal with gifts of global securities and money transfers.
Table of contents
- Is it possible to gift global stocks and ETFs?
- Way 1
- Way 2
- Way 3
- How Paasa facilitates global investing
- FAQs
Is it possible to gift global stocks and ETFs?
No.
As an Indian resident, it is not possible to gift global stocks and ETFs as the Foreign Exchange Management Act (FEMA) places strict restrictions on the transfer of foreign securities (like US stocks held in your Paasa/brokerage account).
According to FEMA regulations, a Resident Indian cannot gift foreign shares to another person without prior approval from the RBI.
Alternative ways Indians are using to gift global stocks and ETFs
While FEMA regulations prohibit any direct transfer of global stocks and ETFs from Indian residents (Indian residents according to FEMA), many Indians actually want to gift global stocks and ETFs to their family members or friends.
Since a direct transfer is not possible, here are some alternative avenues they are using to gift global stocks and ETFs:
1. Selling global stocks & ETFs and sending the money
When people are holding stocks and ETFs with the intention to gift them, or want to use the money held in global securities for the gift, they typically sell the holdings, realise their gains (or losses), and transfer the money.
This results in a tax hit as you have to pay taxes when you sell your investments (if you made a profit).
- If you remit the money to India and then send it as a gift, the transaction is subject to the $250k per year LRS limit. This means that if you are an Indian resident under FEMA, you cannot send out more than $250k per year out of India.
- Since you are sending the money abroad as a gift, LRS regulations for gifts apply in this case. To learn more about the specific LRS regulation applicable to sending money for gifts, visit our guide on Avoid FEMA Violations in Gifts and Donations (LRS Rules).
2. Sending money directly
When you sell your global investments and then send the money, you have to pay capital gains tax on profit made when selling investment.
If you have sufficient liquid cash, you can avoid this by sending money directly from your bank account.
This will still be subject to LRS regulations for gifts and the annual remittance cap of $250k.
To learn more about the specific LRS regulation applicable to sending money for gifts and the correct LRS code in your case, visit our guide on Avoid FEMA Violations in Gifts and Donations (LRS Rules).
3. Using joint accounts
If you want to gift global stocks and ETFs to one specific person (like your spouse), you can open a joint account with them.
To learn more about how these joint accounts work, visit our guide on How are Joint Global Brokerage Accounts Taxed?
How Paasa facilitates global investing
Paasa is the platform used by NRIs, global Indian Investors, and family offices to diversify their wealth across global markets like US, UK, China, Singapore, Switzerland, and beyond.
Paasa offers a comprehensive advisory layer that keeps your portfolio compliant and makes tax filing hassle free with:
- Dedicated relationship manager
- Ongoing remittance, FEMA and tax advisory
- Ongoing tax loss harvesting and rebalancing
- End of year tax documents
What type of documents does Paasa provide to file taxes?
At the end of the financial year, Paasa provides a ready-to-file tax package containing:
- Capital Gains Report: A clear breakdown of Short-Term vs. Long-Term capital gains, calculated specifically according to the 24-month holding rule for unlisted shares.
- Dividend & Interest Reports: Consolidated statements showing exactly how much income you earned and the tax withheld abroad, making it easy to fill Schedule FSI.
- Schedule FA Report: This is typically the hardest part of the ITR. We provide a report with the Peak Value and Closing Value of your assets in INR, calculated using the mandatory SBI TT Buying Rates, so you can simply copy-paste the numbers into your tax return.
If you have doubts around taxation, gifting rules, FEMA, LRS, or compliance, feel free to reach out to our team.
Disclaimer
This article is intended solely for information and does not constitute investment, tax, or legal advice. The material is based on public sources and our interpretation of prevailing regulations, which are subject to change. Global investments carry certain risks, including currency risk, political risk, and market volatility. Past performance does not predict future outcomes. Please seek advice from qualified financial, tax, and legal professionals before acting.
