Yes, you can definitely transfer the money to your dad's or mom's account without any tax liability.
This can be treated as a loan.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Move money from regular savings account while converting to NRE
Hi, I have been living in usa since Nov 2014 on a H1B visa and i am a tax resident here. While moving to usa, I didn't know to convert my regular savings account to NRE. So, I have been sending remittances to my regular savings account with yesbank until today. But, my relationship manager reached out to me saying i need to convert it to NRE & NRO accounts before Mar 31st. For that, she suggested i invest in funds temporarily while the conversion happens. Instead of investing in MFs like she suggested, I was wondering if i could transfer the complete money to my dad's and mom's bank accounts without any tax liability for me or my parents. Can you please clarify if there would be any issue ? Thank you !
Asked 8 years ago in Income Tax
Thanks for your response ! just to confirm, 1. All three of us - me, my dad & mom will be not be tax liable when i transfer from my 'normal savings account' ? 2. Or would you recommend investing in MFs 'temporarily' like bank manager suggested ? All this has started with a notice from yesbank HQ asking to submit a form for FATCA/CRS compliance 4 days back, do you know why there is 31stMar cutoff ? They say if i don't do it before, they'd withhold 30% of the amount. Thanks !
Asked 8 years ago
Dear Sir,
1. Yes, all three of you don't need to pay any tax.
2. I will not advise you to park in equity mutual funds for a short time.
Please feel free to revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Dear Sir,
No tax liability. You can transfer the same Aa gift.
No need to invst in mutual fund.
Sir it is must to converted Local saving account into NRO / NRE account once you become resident of other country within a year it self.since 31.03.17 is year closing they are pushing you for doing same at the earliest.
Any amount lying shall be freezes if you don't convert and it automatically becomes NRO Account. In that case you again need to do documentation procedure and thereafter on any income earned out of that fund withholding tax shall be deducted.
Yes it is suggested to transfer the amount in normal saving account only. 31st March is the Financial year ending date in India. as per Income Tax Act,
Yes you can transfer to your Mom and Dad Accounts instead of investing in MF. March is year ending.
Hello Sir,
The manager asked you to invest the same in Mutual Funds just to cover up his/ her targets.
It was a wise decision on your part to transfer the same in your parents account.
But yes feel free to invest the same in Mutual Funds only if it is your intention to make those investments.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi
Transfer of any amount from you to your parents will be considered as gift and will be exempt from tax. And yes, the cut-off date for compliance with FATCA was 31 March 2017.
Regards
Keerthiga
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