Do I Get Taxed For Money Transfers From Wife?

Coin & relationships: What are the taxation implications if my daughter sends me money from abroad?

Synopsis

Is it legally tenable to send parents money from a foreign land? More importantly, will you or they have to deport any kind of fiscal burden in the form of revenue enhancement? Here are the rules and tax regulations governing remittances from family members who are staying abroad.

If you find yourself living and working in a foreign country while your retired and aged parents are in India, it can be an emotionally stressful state of affairs for both. While at that place may exist little you tin practice about the status other than visiting as oft every bit y'all tin, what you tin can do to help them in their retirement is provide fiscal support. Only is it legally tenable to transport them coin from a foreign country? If yes, how much tin can you transport? More importantly, will you or they have to bear any kind of financial burden in the course of taxation? Here's all that yous need to know nearly the rules governing inward strange remittances to your parents in Republic of india.

Will the coin you send be taxable for your parents?
It is perfectly legal to ship money to your parents in India and they will not incur any revenue enhancement on the transferred amount. However, if they invest this money, and then the income they receive will exist taxable in their hands. The money received in an Indian banking company account from a relative abroad is known as in remittance and these remittances are governed by the Foreign Commutation Management Human activity (FEMA). These volition be revenue enhancement-costless but if the coin is beingness transferred for the purpose of providing living expenses or financial back up, as a souvenir, for education, medical treatment, travel expenses, investments and donations. FEMA besides specifies the family members who can receive the taxation-free money and include the following:

Whatsoever of the sender'southward lineal ascendants or descendants.
Any of the lineal ascendants or descendants of the spouse.
Any spouses of the above two.
Sender'south spouse.
Blood brother or sister.
Brother or sister of spouse.
Brother or sister of the sender'due south parents.

If the money is sent from away to anyone other than the above relatives, information technology will be taxed as income if it is over Rs 50,000 in a year.

How much money can you send them?
According to the RBI, your parents in India tin receive the in remittance in ii ways: Rupee Drawing Organisation (RDA) and Coin Transfer Service Scheme (MTSS). While the old has no upper limit on the inward remittances for personal purposes, this limit is capped under MTSS at $ii,500 and the family fellow member tin can receive a maximum of 30 remittances in a calendar yr.

Volition it exist taxable for y'all in the foreign land?
While at that place is no limit to the money you tin send your parents in India, the foreign country you stay in may have its ain rules and limits on the maximum amount that you tin ship without incurring whatsoever tax liability. These regulations differ for various countries. For example, in the US, you can send up to $15,000 a twelvemonth to India without inviting any tax.

Transfer charges
The charges for inward remittances to your parents' bank business relationship may vary and yous will take to bank check with the banking concern for the exact costs. It is likely that the banking company will inform you about the transfer charges before the transaction is carried out. The price depends on various factors like the electric current currency exchange charge per unit, bank's charges for the same, the country from which the remittance is being fabricated, type of transfer, type of account, amidst others.

If you lot have a wealth whine, write to the states...
All of us take been in a financial dilemma when information technology comes to relationships. How exercise you say no to a friend who wants you lot to invest in his new business venture? Should you have a loan from your married brother? Are you concerned nearly your wife'southward impulse buying? If y'all accept any such concerns that are hard to resolve, write in to us at etwealth@timesgroup.com with 'Wealth Whines' every bit the bailiwick.

(Disclaimer: The advice in this column is not from a licensed healthcare professional and should not exist construed every bit psychological counselling, therapy or medical communication. ET Wealth and the author will not be responsible for the outcome of the suggestions made in the column.)

Print Edition