I am an NRI and not styaing in India. However my salary is being credited to my NRE account with SBI.
I want to trasnsfer about 80000 USD from India to Ethiopia. When i generated an Online request with the bank, the request was cancelled and I am called at bank. (which I can not go as I am not in India).
Next option is to transfer this amount in my brother's account and he would go and he would go to the bank and transfer money.
After about 20 days, I will send back the same amount to him and he wold again transfer the same amount to my account in India.
While handling this transaction, will he need to pay an Income tax ?
There are four steps, I send money from my India acct to his India account, then he would send money to me abroad, I would return the money to his account in India and then he would deposit the same amount in my bank in India.
Asked 1 year ago in Income Tax from Ahmedabad, Gujarat
The transaction you have proposed are restricted under FEMA . The characterization of the transaction at all four stages are restricted under FEMA .
Even under the LRS scheme the resident will not allowed to make a loan and to remitt the money outside India .
It is better that you should use your credits lying at the NRE account .
Talk to Prakash Sinha
4.9 on 5.0
The transactions as defined by you is not allowed under FEMA . I am not clear about your amount being transfer to brothers account. Can you elaborate further. Whether you need to transfer funds from NRE Account to Ethopia or are you having separate account.
Talk to Shyam Sunder Modani
5.0 on 5.0
As long as KYC requirements are complied with and the transactions are for genuine purposes there should not be any problem. If your brother earns any income in this process, it will be taxable in his hands.
Talk to B Vijaya Kumar
5.0 on 5.0
If you are an NRI and your bank account is NRE then this money can be transfered by issue of cheque and bank cannot ask you to come to the bank. Further if you have net banking facility the money can be transferred through net banking operation or you can send an email to SBI for transfer funds to required account. Please do'nt transfer money to your brothers account and cause confusion about tax matters.
Talk to Vijay N. Kale
4.9 on 5.0