Why the money is not taxed on either side
Two ideas sit behind the answer, and both point the same way. First, money you send your parents is family support — it is not a payment for anything, not salary, not rent, not a return on an investment — so it is not income in your parents' hands to begin with. Second, even treated as a gift, a transfer from a child to a parent is a gift between relatives, and a gift from a relative is fully exempt from income tax however large it is (Section 56(2)(x)).
So the regular maintenance you send is tax-free for your parents to receive and carries no tax for you to send. There is no threshold to watch here in the way there is for gifts from non-relatives — the ₹50,000 ceiling that catches gifts from people who aren't relatives simply does not apply between a child and a parent.
This is genuinely one of the simplest situations in cross-border family money. The only thing that occasionally turns it into a question is the pattern of the transfers — regular, sizeable credits can look, to a system, like income unless the source and the reason are easy to see.
The parents' side: no tax, but mind what the money earns
For the parents, receiving the maintenance is not taxable and does not have to be declared as income. Where a little care helps is what happens to money they don't spend. If a parent saves part of the maintenance and it earns interest — say in a fixed deposit — that interest is the parent's own income and is taxed in the parent's hands in the ordinary way.
That is usually a good outcome, not a problem: a retired parent often has little other income, so the interest may fall within their basic exemption or attract little tax, and it sits with them rather than being clubbed back to you. Clubbing applies to gifts to a spouse or a minor child, not to a parent — so income earned on what you give your parents stays theirs.
The practical takeaway is to keep the parents' tax picture in view if the savings build up, but the maintenance itself never becomes taxable simply by being received.
The light paper trail worth keeping
None of this needs a contract. What is worth having is enough of a record that a regular series of transfers is self-explanatory. Sending the money through the banking channel, from your account abroad to your parents' account, already creates most of the trail.
Beyond that, a one-time note — a short letter or even a clear understanding on file that these transfers are maintenance for your parents — covers the rest. On the parents' side, keeping their bank statements and being able to point to the source as their NRI child's support is enough to answer any query in a sentence.
Where transfers are large or frequent, the bank may apply its own FEMA remittance documentation at the time of sending. That is a banking formality and is separate from the tax position, which stays exempt. The aim of the paperwork is never tax — it is simply to make an obviously innocent flow of family money easy to evidence.
A worked example: Priya supporting her parents
Priya, an NRI nurse in the UK, sends her parents in Nagpur around ₹40,000 every month for living costs and her father's medicines. Over a year that is close to ₹5 lakh landing in her parents' account in regular instalments.
None of it is taxable. As support from a daughter to her parents it is a gift between relatives, exempt without any limit, and the parents do not declare it as income. Priya keeps the standing-instruction record from her UK bank, and her parents keep their passbook — between the two, the source and purpose of every credit is obvious.
The only line item with any tax in it is the interest on the small buffer her parents keep in a savings deposit, which is their income, not Priya's, and which sits comfortably within her retired father's low tax band. There is nothing to file on account of the maintenance itself; the records simply make a clean situation impossible to misread.