transferring money to India
This query is : Resolved
29 June 2016
kindly tell me the tax implications of transferring money from abroad to India for NRI Mr. A
there are 2 queries:
1. if Mr. A from abroad is transferring money to his own indian saving bank account.
2. if Mr. A from abroad is transferring money to his real unmarried sister's savings bank account.
29 June 2016
tax implication will be country from where you are sending the money.
1) you can open NRO a.c in india
2) amount will be gift for her sister and tax free for him and her.
1) you can open NRO a.c in india
2) amount will be gift for her sister and tax free for him and her.
Message likes :
1 times
29 June 2016
thanks for the point 2 but pls tell me about the implications of first type of transfer....ie where mr. A doesn't have NRE or NRO account but normal savings account on his name ...which was already there before leaving India.
02 August 2025
Got it! Here’s a clear explanation of the **tax implications when an NRI (Mr. A) transfers money from abroad to India** in these two scenarios:
---
### 1. **Transfer to Own Indian Savings Bank Account (Normal Savings Account held before leaving India)**
* **Account Status**:
If the account is a **regular resident savings account** held before Mr. A became an NRI and he has **not converted it to NRO/NRE account**, technically, it should be converted to **NRO account** once he becomes an NRI (as per RBI rules).
* **Tax Implications:**
* **The money transferred from abroad to this account is considered as a remittance** — **not taxable** in India as income.
* However, interest earned on the savings account is **taxable in India** (as per Income Tax Act) at applicable slab rates.
* Since it is a resident account used by an NRI, there could be **regulatory non-compliance with RBI norms**; RBI requires conversion to NRO/NRE accounts.
* **If funds are from foreign income (already taxed abroad), no further tax in India on principal amount.**
* **Compliance Advice:**
* Mr. A should ideally **convert the savings account to NRO account** after becoming an NRI.
* If the account remains as regular savings account, banks might restrict transactions.
---
### 2. **Transfer to Sister’s Savings Bank Account in India**
* This is considered a **gift** under Income Tax Act.
* **Tax Implication on Sister:**
* Gift from a **relative (brother)** is **fully exempt from tax**, no matter the amount.
* **Tax Implication on Mr. A:**
* No tax liability for Mr. A on transferring money as a gift.
* The sister should maintain proper records as proof of gift if required.
---
### Summary Table
| Scenario | Tax Implication on Mr. A | Tax Implication on Recipient | Compliance Notes |
| -------------------------------------------------------------------------------- | ------------------------------- | -------------------------------------- | --------------------------------------------- |
| Transfer to own Indian savings account (resident account held before NRI status) | No tax on principal transferred | Interest income taxable as per slab | Should convert account to NRO; RBI compliance |
| Transfer to sister’s savings account (gift) | No tax | Gift exempt if from brother (relative) | Maintain gift proof |
---
If you want, I can help you with formal tax clauses or documents for gifting proof or RBI guidelines on account conversion. Would you like that?
---
### 1. **Transfer to Own Indian Savings Bank Account (Normal Savings Account held before leaving India)**
* **Account Status**:
If the account is a **regular resident savings account** held before Mr. A became an NRI and he has **not converted it to NRO/NRE account**, technically, it should be converted to **NRO account** once he becomes an NRI (as per RBI rules).
* **Tax Implications:**
* **The money transferred from abroad to this account is considered as a remittance** — **not taxable** in India as income.
* However, interest earned on the savings account is **taxable in India** (as per Income Tax Act) at applicable slab rates.
* Since it is a resident account used by an NRI, there could be **regulatory non-compliance with RBI norms**; RBI requires conversion to NRO/NRE accounts.
* **If funds are from foreign income (already taxed abroad), no further tax in India on principal amount.**
* **Compliance Advice:**
* Mr. A should ideally **convert the savings account to NRO account** after becoming an NRI.
* If the account remains as regular savings account, banks might restrict transactions.
---
### 2. **Transfer to Sister’s Savings Bank Account in India**
* This is considered a **gift** under Income Tax Act.
* **Tax Implication on Sister:**
* Gift from a **relative (brother)** is **fully exempt from tax**, no matter the amount.
* **Tax Implication on Mr. A:**
* No tax liability for Mr. A on transferring money as a gift.
* The sister should maintain proper records as proof of gift if required.
---
### Summary Table
| Scenario | Tax Implication on Mr. A | Tax Implication on Recipient | Compliance Notes |
| -------------------------------------------------------------------------------- | ------------------------------- | -------------------------------------- | --------------------------------------------- |
| Transfer to own Indian savings account (resident account held before NRI status) | No tax on principal transferred | Interest income taxable as per slab | Should convert account to NRO; RBI compliance |
| Transfer to sister’s savings account (gift) | No tax | Gift exempt if from brother (relative) | Maintain gift proof |
---
If you want, I can help you with formal tax clauses or documents for gifting proof or RBI guidelines on account conversion. Would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Regarding Appointment of auditor in case of casual vacancy
- GST- DRC 03 RCM Liability
- Query on managerial remuneration u/s 197 of CA 2013
- Conversion of Proprietorship Firm to Partnership Firm
- Updated return filing
- Validity of form 15 G and 15 H on Interest on fixed deposit
- Supply to unit situated in SEZ
- Temporary GST registration
- TDS AFTER SUBMISSION OF 15G OR H
- Additional income for updated return
- GSTR 1- Amend Credit Note
- Audit of F and O T/O
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
- Revision under Section 264 in The Income Tax Act, 1961
- TDS under section 195.
Trending Online Classes
CAclubindia
