My son lives abroad and often sends money to my wife and my bank accounts. Are such amounts taxable in our hands? Also, what is the limit of such remittances?
—Name withheld on request
According to the Income Tax Act, 1961, any amount received by an individual from his children is not taxable.
Children fall under the exempted category of ‘relatives’ as defined under the IT Act. Hence, money received from your son by your wife or by yourself is not taxable in any of your hands.
Also, there is no limit on what is allowed in your bank account from outside India. However, it may be noted that Indian tax authorities may sometimes question the source of this income at the hands of your son (i.e. sender). In that case, your son may be required to submit necessary documents to the Indian tax authorities to certify that such income was earned outside India and that no part of such income accrues or arises in India .
Also, if your son qualifies as an Indian tax resident because of the number of days he has been in India in a particular year, his global income may be subject to tax in India and his residential status and his global income A detailed examination of the taxability of May be required in India.
Further, money received from anyone other than your relative (spouse, brothers, sisters, parents, descendants/descendants of the taxpayer etc.) is taxable if the aggregate amount of such wealth exceeds ₹50,000 during a year.
Shailesh Kumar is partner of Nangia & Co LLP. Send your queries to mintmoney@livemint.com
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