My brother shifted abroad for a job at Google. He has been contributing to our regular expenditures here in India. Are there any tax implications for this kind of transaction?
Moreover, next year, I will be moving abroad for my further studies. What if my parents send me money to help me with my education and other expenses during this period? Do they need to pay any tax on this?
Your situation has two types of transactions and both of them fall under foreign remittances—one is inward (money coming into India), and the other is outward (money going out of India).
Let me explain both the situations one by one:
Receiving money from abroad:
When you or your family receive money from your brother living abroad, it is classified as inward foreign remittance. As per the Income Tax Act, this is considered a gift, and since it is sent by a close relative, it is not taxable.
There’s a list of people that the income tax act identifies as relatives. This includes your parents, siblings and a few other relatives as well. Here’s the detailed list.
If anyone apart from them sends money, it will be taxable if it exceeds ₹50,000 in a financial year under the head ‘Income from other sources’.
Even though the amount is not taxable, it is a good practice to report it in your ITR under ‘Exempt Income’ (Schedule EI).
Sending money abroad:
Now, sending money abroad will have some compliances. Such transactions fall under the Liberalized Remittance Scheme (LRS).
Under this, all outward remittances are subject to TCS (Tax collected at source) if the remittance amount exceeds ₹10L (updated in Budget 2025).
But the actual TCS rate depends on why the money is being sent:
In your case, since the amount is being sent for education purposes, there’ll be no TCS if you’ve taken a loan, otherwise, 5% TCS on the amount exceeding ₹10L.
Lastly, TCS isn’t actually part of your tax liability, and you can claim a refund of this amount when you file your ITR.
Remember, TCS is collected over and above the actual amount of the transaction unlike TDS.