• Encashing a USD denominated cheque received as a gift.

Sir/Madam, 
My mother, resident citizen of India, received a US-bank cheque for an amount of $14000 as a gift from her own brother, who is an Indian-born naturalised citizen of USA.
Is there any tax risk on receiving such a gift?
What code has to be specified for the remittance, when filling the form in the bank?
Our bank is insisting that a gift exceeding Rs100000 is not allowed, and we have to claim this as a Family maintenance contribution. Please clarify.
Asked 1 month ago in Income Tax from Hyderabad, Telangana

Hi,

 

If donor is a real brother of your mother, your mother can receive a gift of 14k usd without any tax.

 

It needs to be shown as gift.

Lakshita Bhandari
CA, Mumbai
4255 Answers
239 Consultations

5.0 on 5.0

No, you bank is incorrect in quoting the limit of 1 lac. Ask them for the relevant provision. You need to show it as personal gifts only. That is correct code.

Lakshita Bhandari
CA, Mumbai
4255 Answers
239 Consultations

5.0 on 5.0

No there is no tax risk in receiving such an amount but just prepare a gift deed for the same and the code needs to be mentioned as family maintenance because in RBI code there is no such code as gift.

 

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
2688 Answers
24 Consultations

5.0 on 5.0

No there is no limit for gift if you receive it from your relatives which is fulfilled in your case.

Naman Maloo
CA, Jaipur
2688 Answers
24 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

Your mother will not be subject to tax as the gift from the relative is not covered in the taxable income in the hands of the recipients . There is no limit of such gift from the relatives u/s 56 of the Income Tax Act.

 

Your bank is not correct in quoting the limit. You need to ask the relevant provision for the same.

 

It is advisable that receive the entire amount through gift deed.

 

 

 

 

 

Payal Chhajed
CA, Mumbai
3730 Answers
50 Consultations

5.0 on 5.0

There is no limit of such gift from the relatives u/s 56 of the Income Tax Act.

 

The code is correct.

Payal Chhajed
CA, Mumbai
3730 Answers
50 Consultations

5.0 on 5.0

Hello,

 

No, there is no tax on a gift from a relative as per the income tax law. There is no limit of Rs. 1,00,000 for Gifts. You can claim it as the Personal Gift.

I hope that this answer satisfies your requirements.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
1587 Answers
5 Consultations

5.0 on 5.0

There is no limit on the gift from a relative as per the Income Tax law.

Hunny Badlani
CA, Madhya Pradesh
1587 Answers
5 Consultations

5.0 on 5.0

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