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Plz advise - poa or stamp paper ?

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CA Gaurav Sharda Free Lancing and Studying [ Scorecard : 34]	Posted On 22 June 2012 at 10:14
	Facts of the Case : Money is transferred from outside India to my clients account in India.... Money is transferred by client's aunt (mother's Sister) for investments to be made in India in her name..(money is transferred in bits and pieces... (1st trf is in August 2011) My client then trf some amount to an Dmat account in his name for investment purpose, but d deal didnt turn out and hence the amount will be refunded by the Dmat Account (bank) and balance amt is still in his bank.. My client doesn't have income exceeding GTI.. So wat does he do, coz huge amount is lying in his bank which belongs to his aunt... There are chances that he may come under scanner as huge credits can be seen in his bank account.. Till now, what i have told him is to get a POA in his name from her aunt... Should i also tell him to trf the amount in an Separate NRE/NRO account where he can be the joint account holder... Regards, CA Gaurav Sharda

Bhavik Accountant [ Scorecard : 60]	Posted On 14 July 2012 at 13:03
	My suggestion to this would be to treat the transfered amount as gift (i.e. incase if the investments are made in his name), as gifts received from relatives attract no tax. now, if the investments were made in the aunts name then it is advisable to open a NRE account and instead of being a joint holder, submit POA to bank so that he can issue cheques and so on. I guess RBI permission is required incase the funds are on repatriable basis. Now, as for the IT scanner, he may be asked to submit proof of income or source of income of aunt for the said amounts, if that is found satifactory then I guess there should be no reason to worry. you must be aware that if the amounts are too huge lying in your clients account then any interest earned will be taxable to him, transfering the said amounts to NRE account will be considered as Gift to your clients aunt. and hence the funds can be repatriated back to his aunt incase the deal doesn't work. I hope the above can be of some help.


CA M Indani Partner [ Scorecard : 245]	Posted On 20 July 2012 at 14:16
	Mr Bhavik... if you show the said transaction as gift... the amount will be owned by the benefitiary... You can treat as loan/ advance from relatives...

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