• Money remittance from USA to India | redeposit into Indian account

Hi,
My son (NRI) sent money (almost 1 crore) from USA to my India back account through various bank channels since 2006. I have all the remittance details and copies(including USA bank statements). I spent some money for housing and rest of the money I invested it in the land. Now I turned to 75 years old and I would like to send his money back to USA through the same bank channels by selling the invested land. >> I never submitted the tax returns so far, since money came from USA.

Q1: Is there anyway to redeposit the amount of remitted money into my account without paying any taxes, since i have received it from USA? (if i didn't took it out from my bank account, no tax related questions are raised up.)

Q2: Buyer is ready to give a check for the amount of remitted money. Can i deposit it into my bank account and claimed it as a remitted money that i had took it for various purposes long back ago. 

Thanks
Subbarao Chinthapalli
Asked 5 years ago in Income Tax

Hi,

If you are earning capital gain from selling land then you are liable to pay capital gain tax in india.

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

Dear Subbarao,

You will have to pay capital gain taxes arising in account of sale of property. Post that you can transfer the money as gift to your son subject to FEMA guidelines.

The taxes are being charged on sale of property. It is immaterial whether the acquisition was through foreign money or Indian money.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

You will sell the land and get it registered so income tax department would come to know that you have sold land and they will ask you to pay tax so you will have to pay tax on capital gain on sale of land you can't say its remittance of money received also when other person would deposit cheque in your account they will ask who is this who deposited this money in your bank.

So i would suggest to pay the due taxes and then remitt the money back.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

Hi Subbarao,

Hope you are doing well !

Firstly, you will have to pay capital gain tax on land sale. After that you can gift the money to your son.

It doesn't matter whether the acquisition of property through foreign money or Indian money.

With regards to money transfer to your son please consult with FEMA expert.

Thanks & Regards,

Payal Chhajed

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Hi,

- Yes you can remitt the amount back to son after payment of taxes if any on the sale of land. If any income is generated from the amount remitted from abroad is taxable in India.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

Hi Subbarao

Capital gains shall be taxable for the sale of land. Once capital gain taxes are paid, you may remit the money to your son.

Further, it is advisable to gift such money legally to your son to avoid any complications.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

Hi Subbarao,

You will need to pay tax, if any, on the capital gains arising from selling the land. Post paying the taxes, you can draft a gift deed and remit the money back to your son. However, also consult a FEMA expert for the amount of money you want to remit out of India.

Regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

I believe it’s a pure remittance frim your son. If your son is a non-resident and his income and the remitted amount is earned outside India. This would not be a taxable income in India. Also since it’s a pure remittance in past years and not an income in your hands, it’s declaration is not required in your past returns.

However, the land though acquired if is taken in your name, the tax return may just require its disclosure, depending on the year of acquisition. The sale of lands is definateky a taxable event and hence necessary taxes should be paid and return should be filed. The remittance our of India can be shown as repayment of past loan, but would need proper supporting and documents before the RBi

Jasmina Jain Shah
CA, Greater Mumbai
454 Answers
4 Consultations

5.0 on 5.0

No long relative can't gift and if you receive any gift you need to pay taxes on same.

You can receive gift only upto ₹50000.

You can take a chance by saying that it was a loan given to nephew which he returned back and you can ask him to give a notarized statement.

This can be accepted or cannot be it just depends on your case and how it's presented.

This is the only way to save tax otherwise you'll have to pay tax on the entire amount.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

Dear Sir,

 

Gifts given by individuals who do not fall under the ‘relatives’ definition of the Income Tax Law is chargeable to tax. If the amount of money or its worth gifted exceeds Rs 50,000, the whole amount will be taxable. In this case, Rs 40 lakh will be charged to tax.

 

However, if it was a loan and he will be paying back, there will be no tax on it.

 

 

 

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Hi

Gifts from relatives are exempt​.

Relatives u/s 56(2)(vii) from whom Gift is permissible under Income Tax Act, 1961

(i)  spouse of the individual;

(ii)  brother or sister of the individual;

(iii)  brother or sister of the spouse of the individual;

(iv)  brother or sister of either of the parents of the individual;

(v)  any lineal ascendant or descendant of the individual;

(vi)  any lineal ascendant or descendant of the spouse of the individual;

(vii)  spouse of the person referred to in clauses (ii) to (vi)

 

If your nephew is not covered under the above definition, gift shall be taxable @30%.

Alternatively, you may show it as a repayment of loan by him provided you haven't filed balance sheet with ITR in any of the earlier years.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

Hi

Gifts from relatives are exempt​.

Relatives u/s 56(2)(vii) from whom Gift is permissible under Income Tax Act, 1961

(i)  spouse of the individual;

(ii)  brother or sister of the individual;

(iii)  brother or sister of the spouse of the individual;

(iv)  brother or sister of either of the parents of the individual;

(v)  any lineal ascendant or descendant of the individual;

(vi)  any lineal ascendant or descendant of the spouse of the individual;

(vii)  spouse of the person referred to in clauses (ii) to (vi)

 

If your nephew is not covered under the above definition, gift shall be taxable @30%.

Alternatively, you may show it as a repayment of loan by him provided you haven't filed balance sheet with ITR in any of the earlier years.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

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