My daughter is finding out overseas. She is reaching the top of her course and may have some funds throughout the interim interval earlier than she finds a job. She might require the rupee equal of $10,000. Am I allowed to ship a lot cash to her and what would be the tax implications thereof on each her and me?
The quantity that you simply intend to remit might be handled as a present made by you to your daughter. As per Section 56 of the Income Tax Act, the worth of presents acquired isn’t taxable within the palms of the recipient so long as the combination worth of all of the presents acquired throughout the monetary yr doesn’t exceed fifty thousand rupees. Once the combination of presents acquired exceeds the edge of fifty thousand rupees in a monetary yr the total worth of all of the presents are handled as earnings of the recipient. However, presents acquired from sure specified family members aren’t handled as earnings no matter the quantity. Father is included within the definition of specified family members and thus it is not going to be handled as her earnings.
This transaction additionally doesn’t have any tax implications for you. RBI permits each resident Indian to remit as much as 2.5 lakh $ yearly beneath the Liberalised Remittance Scheme (LRS) for specified functions together with for upkeep of your family members.
You have to strategy your financial institution for this objective and they’ll show you how to with the process to be adopted for remittance of cash to your daughters overseas. The newest funds has proposed tax assortment for remittance made beneath LRS and subsequently the financial institution might gather further cash as TCS (Tax Collection at Source) which it is possible for you to to say towards your tax legal responsibility whereas submitting your ITR subsequent yr.
Balwant Jain is a tax and funding knowledgeable who might be reached at [email protected] and @jainbalwant his X deal with.
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Updated: 05 Sep 2023, 12:22 PM IST
