Transfer money from US to an Indian account

ashish

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On of my colleagues father helped his relatives financially long years back.

Now that the financial condition has improved and those relatives got settled in US, they want to pay the amount back to his father.

The question is the amount runs into lakhs of rupees.
Will it attract any government taxes once they get deposited in his fathers savings account. I think he said it will be either ICICI, SBI or YES bank accounts.

Further, will it IT people come to know about such transaction or will the bank itself inform the IT dept. and then all the pains of investigations etc?

His father and he both are regular tax payers and simple normal people, no black money etc. background.
 

rdst_1

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Was the earlier transaction done in cash or via bank transfer. Did they make any written agreement about the original transaction.
 

Sobirvs

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I think you can get paid as 'gift" for certain limit in $$. Check around what that limit can be.
 

technofast

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Used to do it through Western Union from US to Indian bank (ICICI). You can send up to $50,000 and yes the bank may report to tax authorities if the amount of transfer exceeds more than 15 lakhs to a savings account.
 

ashish

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Was the earlier transaction done in cash or via bank transfer. Did they make any written agreement about the original transaction.
Nope it was straight by cash in few months installments. The amount was around 8 - 10 lacs. No agreement involved as it was mutual and their families are good and all. No conflicts etc.[DOUBLEPOST=1551963921][/DOUBLEPOST]
Used to do it through Western Union from US to Indian bank (ICICI). You can send up to $50,000 and yes the bank may report to tax authorities if the amount of transfer exceeds more than 15 lakhs to a savings account.
So if the relatives transfer in bulk friends dad will be at fault?
What all stuff needs to be shown to the IT then? This is where they are clueless.
 

rdst_1

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Is the person in India comfortable in receiving money in cash in India. If so, then they can use ahem sources to get the money easily.
Else ask the people in US to send money to accounts of closest relatives like parents or grandparents or even remit money to their own account in India and then withdraw that as cash and hand over to your colleague's father.
The IT people would require proof of earlier transaction. That would have been either bank transaction details or agreement. Since they have neither, only option is to receive money as cash.
I lent my brother-in-law 18L in 2017 for a land deal they wanted to make and they were coming up short because their money was stuck somewhere else. When they got the money, they returned mine. All was done through bank transaction so no questions were asked by IT dept.
 

Lord Nemesis

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Any amount you receive from abroad in excess of Rs 50,000 (Note that this Rs not $) per year from anybody other than spouse/close relatives is considered as "other income" for the recipient and income tax has to be paid for the same.

A close or blood relative would include any of the following:
  1. Spouse of the individual
  2. Brother or sister of the individual
  3. Brother or sister of the spouse of the individual
  4. Brother or sister of either of the parents of the individual
  5. Any lineal ascendant or descendant of the individuals
  6. Any lineal ascendant or descendant of spouse of the individuals

Any amount beyond $14,000 per year gifted to a single individual is also taxable in US.[DOUBLEPOST=1552198859][/DOUBLEPOST]
bank may report to tax authorities if the amount of transfer exceeds more than 15 lakhs to a savings account.
Amount exceeding 5 lac. Used to be 10 lac earlier. Doesn't matter whether the source is local or foreign.
 
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cute.bandar

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No idea about taxes. But transferwise.com can be used to transfer the money. Used it in the past to get paid for work.
 

nRiTeCh

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Local taxation is for anybody other than spouse and close relatives.
As an example,
What if my brother working in US or anywhere abroad wants to send me money purely for a genuine Help basis or to cope up with some critical crysis and the amount runs into few lacs say 4 lacs. What then?

I don't know if a direct neft type transfer works in this case or do we need to use any other money transfer methods.

So even if he does mentions in transaction note the specific reason etc. will my bank still question me for such credited amount and will they directly inform the IT to trail me??
 

Lord Nemesis

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I have had only one direct personal experience where 25k was transferred overseas to my local ICICI account. This was meant to be a marriage gift from one of my overseas cousins to another cousin residing in India. I didn't declare it while filing it returns since its a small amount. Usually you can declare and furnish details of any large transactions during the filing process. As for the bank reporting transactions to RBI or IT, it would be a automated process. They don't really see what the transaction is for. The bank systems would just have some audit logs which would be synced with the target systems.
 

nRiTeCh

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Ok so plainly it means anything under 1lac and you good within safety radar. Exceeding the same and you are bound to land in trouble or is a hit or miss luck. Fortunately got nobody abroad else would had loved to go through the procedures for learning purpose. Would have asked to transfer funds amounting to 2lacs and would had awaited banks or IT response.
Btw am I supposed to declare such amount as a gift while filling IT or how?