My son lives overseas and infrequently sends cash to the financial institution accounts of my spouse and myself. Are such quantities taxable in our palms? Also, what’s the restrict for such remittances?
—Name withheld on request
According to the Income Tax Act, 1961 any sum of cash a person receives from their kids isn’t taxable.
Children are lined beneath the exempted class of ‘relative’ as outlined beneath the I-T Act. Hence, cash obtained out of your son by your spouse or your self isn’t taxable in both of your palms.
Further, there isn’t a restrict on quantity permissible to be remitted from exterior India to your checking account in India. However, it might be famous that Indian tax authorities could typically query supply of this earnings in palms of your son (i.e. the remitter). In that case, needed documentation could should be submitted by your son to the Indian tax authorities to substantiate that such earnings was earned exterior India and no portion of such earnings accrues or arises in India.
Further, in the event you son qualifies as an Indian tax resident attributable to variety of days of his keep in India in any specific 12 months, then his international earnings could also be topic to tax in India and detailed examination of his residential standing and taxability of his international earnings in India could also be required.
Further, cash obtained from somebody aside from your relative (partner, brothers, sisters, mother and father, lineal ascendants/ descendants of taxpayer and so on) is taxable if the aggregated of such cash exceeds ₹50,000 throughout a 12 months.
Shailesh Kumar is associate, Nangia & Co LLP. Send your queries to [email protected]
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