1. Can parent/in law/sibling give the gift without issues? =====.Yes; even if the amount of a gift exceed $14K, they do n ot need to file IRS form 709 as they are non resident aliens.
2. How much is the limit in terms of $ to get gift from India?========>>Asmuchas you want; Some countries place limits on what you can send OUT. However aslongas the amount of the gift exceeds $100K , and if you are a US resident for tax purposes, then you need to file form 3520 for info return to the IRS, NOT to pay gift tax. However, if you are a non resident laien, then you do not even need to file form 3520; your bank in US automatically reports to IRS if the amount of gift from INDIA exceeds $10K.
3. Do I have to pay taxes in US and does the donor have to pay any taxes in India or USA?=======>No not at all; as a done , you do not pay gift tax on your gift and in this case, the donor in INDIA doesn’t pay gift tax to IRS either since they are NOT US citizens/residents.
4. Can I use this money as gift as a downpay ment for buying new home?======>.Of course, you can use the gift as a downpaymet to buy a new home; however,
5. What documentation does she have to prepare and what documets do I need to prepare?==========>>No doc is needed sine the donor in INDAI doesn’t need to report her gift to US IRS/your state ; I guess she may have to report it to INDIAN taxing authority(ies).
6. Does she have to show any proof as to where the money came from in her account before it was transfered to my account as gift?========> No as mentioned above.
5. Are there any other restrictions, forms to be filed by me in US while filing taxes etc for the same.========>No as mentioned above you do not need to report the gift money from INDIA on your US return whether you are a US resident for tax purposes.