What Is The Maximum Amount An NRI Can Send Money To His Relatives Without Taxation Impact?

What is the maximum that can be sent by son staying in U.S to his dependent parents? Can that money be invested in F.Ds.V.M. Bhuwaneesvari ,Chennai

A non resident Indian  can send any amount of money to his following relatives without any fear of tax either on him or in his relatives hand .

i) spouse of the individual;

(ii) brother or sister of the individual;

(iii) brother or sister of the spouse of the individual;

(iv) brother or sister of either of the parents of the individual;

(v) any lineal ascendant or descendant of the individual;

(vi) any lineal ascendant or descendant of the spouse of the individual;

(vii) spouse of the person referred to in clauses (ii) to (vi);

[explanation to section 56(2)9vi) of the I T Act]

What Can You Do with The Money

Once you get the gift ,Use for business, keep in fixed deposits , you can use it the way you want to use it. The money becomes absolutely yours. While simple bank transfer is enough , the income tax authorities can always check if the donor had the capacity to send you the money . There afore a little bit of care can keep you out of dangers of harassments .

Steps to follow for hassle free receipt of Gifts

1. Get one Gift Deed prepared in which following information must be included

              Name & address of Donor & Donee

              Relations between them

              Cheque /Draft number , date , bank branch from where the money has come.

             Preferably the work the Donor does outside the country.

             A declaration that the money being gifted is absolutely of the Donee once it is given

2. Always get the money through banking channel only.

3. If you are filing return, then show the money in exemption column.