Income Tax for NRIs in India

Income Tax Income from Other Sources
43

Hi,My son is NRI and He is in USA.
He wants to send about 10K US dollars to my bank account.I am going to use this money to prepay homeloan which is in my name. I can show the 10K as gift from him.My question is what will be tax implications for me? Thanks.

44

Hi @Suresh_Katkar

It is perfectly legal to send money to your parents in India and they will not incur any tax on the transferred amount. However, if they invest this money, then the income they receive will be taxable in their hands. The money received in an Indian bank account from a relative abroad is known as inward remittance and these remittances are governed by the Foreign Exchange Management Act (FEMA)

These will be tax-free only if the money is being transferred for the purpose of providing living expenses or financial support, as a gift, for education, medical treatment, travel expenses, investments and donations. FEMA also specifies the family members who can receive the tax-free money and include the following:

  • Any of the sender’s lineal ascendants or descendants.
  • Any of the lineal ascendants or descendants of the spouse.
  • Any spouses of the above two.
  • Sender’s spouse.
  • Brother or sister.
  • Brother or sister of the spouse.
  • Brother or sister of the sender’s parents

While there is no limit to the money you can send your parents in India, the foreign country you stay in may have its own rules and limits on the maximum amount that you can send without incurring any tax liability. These regulations differ for various countries. For instance, in the US, you can send up to $15,000 a year to India without inviting any tax.

Hope this helps.

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45

Hi,

I am a resident Indian and my sister is an NRI. She is looking to book/buy an apartment from a builder (which has just started construction) in India.
In this regard I would like to know if it is possible for me (as a resident Indian) to lend her (an NRI) some of the money for this apartment (which she will repay gradually)? And/or are there any limitations on amount, interest rate etc.
Also what would be the tax implications for both me and her in this situation?

Thanks!

46

Hi @Dev_C

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47

An NRI person having no income from India except interest from NRE account of Rs 6L; is filing ITR mandatory (even though tax liability is 0)?

Note: because this is NRE account, the interest is exempt from income tax. So tax liability is 0.

48

Hi @Pratha

Any interest on the NRE account is fully exempt under Section 10(4)(ii) of the Income Tax Act without any limit.

49

But is there a requirement to file ITR or I can skip?

50

@Divya_Singhvi What are the limits of Cash deposit or Online deposits into NRO accounts by residents in India ? Any documents required while cash depositing by the payee at bank other than PAN for > 50K?

TDS will be deducted only on the categories incomes generated from the NRO, Not the inward deposits made into that right?