Money received by nri in india

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2017 Sir,

Suppose,
an NRI has given some amount to another NRI with him abroad in the same country.
This amount was given by the first NRI, to the second NRI, to help him in an emergency condition of his medical treatment .

He had helped him many times in his problems by giving him money in foreign country. (in the foreign currency )

Now, the second NRI wants to give the money back to the first NRI. But, he has no money there in foreign country.
He has asked his father who is in India, to deposit or transfer the amount into the first NRI’s bank account in India.

Que. 1 : What type of impact will there be, on the taxable income of first NRI ?

Will this amount be treated as income of the first NRI ? ( Because, the amount is to be deposited/transfered into his indian bank account.)

Que. 2 : Will such arrangement be legal ? or valid ?
Or Will it be in against of any rule or regulation or law/act ?

Que. 3 : The intention of this arrangement is genuine.
Will this arrangement be treated as "HAWALA" transaction ?
Are such arrangements allowed in India ?

Que. 4 : Will it be ok for the first NRI, if he receives his money back in this way ? Or not ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

01 October 2017 1 Such transfer will be treated as gift and tax payable if the amount exceeds Rs 50000.
2 Such arrangement is not legal. His father can transfer the amount to his son abroad which is permitted and he can return the borrowing out side India.
3 Such arrangement not allowed.
4 Not OK.

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