Tax on money given by parent after selling their property

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2017 I am an NRI. My mother (who is a RESIDENT) owned a property wholly in her name and she has sold it. She wants to give some money to me.

Q1) Will this money be treated as a gift in my case and there is no tax applicable on it for me?
Q2)If this money will be treated as a gift to me should I obtain any document/affidavit from my mother to prove this?
Q3) Should I deposit this money in my NRO account ? If YES, how can I transfer this money to my NRE account later on, what are the documents required?
Q4)Can my mother deposit this amount in my NRE account directly ? If YES, what are the documents required to be submitted by her to my Bank manager?
Q5)Any other point of importance to be taken care?

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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10 September 2017 1. The money given to you by your mother will fall under Gifts from relatives and therefore exempt from tax.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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10 September 2017 2. Receive the money through banking channel instead of in cash. The transaction then will become a documentary evidence.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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10 September 2017 3. Yes, since you are a Non resident, you need to deposit the money in your NRO account only. Credits in NRE account is allowed only through inward foreign remittance. Therefore, you can't deposit the amount in your NRE account anytime in the future directly.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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10 September 2017

4. Please refer my answer to your previous question.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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10 September 2017 5. No other point of importance in your case.

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2017 Dear Sir, Thanks for your clarification. With ref to my Q # 3, I would like to clarify the following :
1) Once the money is deposited in my NRO Account, what documents do I need to transfer it to my NRE account in order to repatriate it to my overseas account. [ Do I need Form 15CA or 15CB or others] ?
2)Can my mother remit the money directly to my overseas account rather than depositing in my NRO account?

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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11 September 2017 Deposits or transfers in NRE account is not possible in INR. So, you cannot remit from NRE.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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11 September 2017 Can my mother remit the money directly to my overseas account rather than depositing in my NRO account?

That is a better option as this gift remittance will fall under purview of LRS and she can remit up to 2.5 lacs USD per annum.. NRIs cannot remit funds under LRS. So, this seems to be a better option.

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