My son needs financial help to buy a house in the UK, where he has been living since 2011 and has since made only two short visits to the country – each of three weeks duration. As an Indian citizen, how much money can I send to her to buy a house without any tax liability?
Name withheld on request
Under India income tax, income tax is levied on any sum, movable property or immovable property received in excess of 50,000 by a person without consideration (i.e., without compensation) or for insufficient consideration, except gifts received from a “relative” or on marriage or by inheritance or other specified exceptions. Relatives include spouse, siblings, in-laws. , parents, any descendant or descendants of self or spouse and others.
Assuming that the amount is transferred by way of gift, the gift received by the son from his father is covered by the exclusion provided and hence, will not be taxable in India in the hands of your son. However, the taxability of the gift in the UK may need to be analyzed separately. You can seek advice from a UK tax professional.
i borrowed 10 lakhs from my cousin, who deposited the amount in my bank account in India. What would be the charges and my tax liability for transferring the amount to Australia where I live. Is there a limit on the amount I can transfer to Australia?
Name withheld on request
Under the Exchange Control Act, you can remit to a bank outside India up to a maximum of 1 million per financial year from your Non-Resident (Ordinary) (NRO) account. Assuming that this is a genuine personal loan transaction between you and your cousin and the loan is to be repaid to your cousin within the agreed time, there will be no income tax liability in your hands in India.
Sonu Iyer is the Tax Partner and People Advisory Services Leader at EY India.
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