New Delhi, June 15 -- I am a resident of India and want to gift Rs.25 lakh to my daughter, who is an NRI and has been residing in the USA for the past four years. This will be by transfer to her overseas bank account. I wish to understand whether TCS would apply to such remittance and, if applicable, the applicable rate of TCS. Is the transfer to the NRO account any different?

Under the Indian Income-tax Act, any gift received by your daughter, being an NRI, from her parent would qualify for exemption from tax in India, since gifts received from specified relatives are not regarded as taxable income. Accordingly, the proposed gift remittance of Rs.25 lakh would not give rise to any tax liability in her hands in India.

The proposed remit...