It is perfectly legal to send money to your parents in India and they will not incur any tax on the transferred amount. … The money received in an Indian bank account from a relative abroad is known as inward remittance and these remittances are governed by the Foreign Exchange Management Act (FEMA).
Is foreign remittance exempt from tax?
Foreign remittances exceeding Rs 5 million do not attract any addition to income chargeable to tax. Only if the foreign remittance”s source is not explainable, such amount will be added in income chargeable to tax.
Do I have to pay tax on money transferred from India to USA?
No, the money transferred to US from India is not taxable. But, if it exceeds US $100,000 for any current year, you must report it to the IRS by filing Form 3520. … However, if the money is in form of gift, gift taxes in the US may be applicable.
How much money can Indians remit abroad?
Under the Foreign Exchange Management Act (FEMA) provisions, an Indian citizen can remit up to $250,000 (around ₹1.86 crore at present) in a financial year for specified transactions.
How much is tax on remittance?
Is foreign remittance is taxable in India? Money remitted outside India will be subject to a 5% tax collected at the source (TCS). The TCS rate will be 0.5 per cent of the money sent if the transfer is paid out against a loan acquired for higher education.
Do I need to declare money from abroad?
While you may not need to pay tax on large sums of money being sent abroad, some governments will require you to file a declaration that you are bringing the money into the country. Failing to declare the assets could result in a fine.
Is money transferred from India to UK taxable?
Tax for sending money from India to the UK
If you are sending money from India to the UK, you will have to pay a 5% tax on any amount above ₹ 7,00,000. There is a reduced tax rate for payments taken out as loans for educational purposes.
Can parents send money from India to USA?
Yes, if you and your gift recipient are both Indian citizens then there is no gift tax levied (in India or the US) on the amount transferred .
Can NRI send money from India to USA?
To begin the transfer of money from India to the US, the NRI should get a certificate from a chartered accountant (CA) in India. … Once the Form 15CB has been completed, the NRI must fill another form called Form 15CA. This is a form that is to be filed online with the Indian tax department.
Is it legal to receive money from overseas in India?
All governments welcome funds from foreign countries as it bolsters the economy. India has not sent any limits on receiving funds from abroad. However, the foreign country you are in might have regulations that limit the amount of money you can send abroad.
Is there a limit on sending money abroad?
There’s no international limit or law regarding the amount of money you can send or receive from abroad.
Who pays TCS foreign remittance?
TCS shall be collected by the authorised dealer or seller of the package. Under the RBI’s LRS, individuals can remit a maximum of $250,000 abroad every year.
How much is TCS on remittance?
Applicability: Under the Liberalised Remittance Scheme (LRS), the Bank is required to collect TCS at the rate of 5% on the aggregate remittance amount exceeding Rs. 7 lakhs during a Financial Year.
Is TCS applicable on foreign remittances?
A. TCS will be applicable for all foreign cash withdrawals through ATM, POS or e-commerce, including transactions done on Foreign Merchants or sites which offer Dynamic Currency Conversion (DCC) transactions.