There is manager in one of the bank outside india. One of the account with some money deposited in it. The account owner is expired before 10 years & there is no next of keen. Bank manager wants to represent me as next of kin with all legal process. Amount is arround $200000. This amount is transferred to my account in india. I need to transfer 50% amount to manager from this money & 5% as expenses. Remaining 5% will be mine. My queries in case manager can trusted 1. Is this transaction is legal? 2. There will not be any voilation of laws in india? 3. What type of tax is applicable? 4. How much tax & what is amount on which tax is applicable?
01 March 2015
First of all it is an illegal transaction. Please avoid it else you will land in problem. Those person(pose as manager) take some money from you and no money will come to you, they are only cheaters.
02 March 2015
I am not going to give single money to him. Only i want to clarify that what type of tax & how much tax & on how much amount is applicable if i get money in my account if transaction is legal.
02 March 2015
I am not going to give single money to him. Only i want to clarify that what type of tax & how much tax & on how much amount is applicable if i get money in my account if transaction is legal.
05 March 2015
I am not going to give single money to him. Only i want to clarify that what type of tax & how much tax & on how much amount is applicable if i get money in my account if transaction is legal.
02 August 2025
Ashish, thanks for clarifying you want to understand the tax implications **if** the transaction were legal (though I must stress: such transactions often raise legal and compliance risks).
### 1. **Is this transaction legal?**
* Generally, claiming to be a next of kin and transferring money from a deceased person's account after 10 years without legal succession or probate is **very risky and likely illegal** in most jurisdictions. * Banks and tax authorities are strict about such claims; proper legal documents and permissions are mandatory.
### 2. **Violations of laws in India?**
* If money comes to your Indian bank account without proper legal backing, it may be treated as **unaccounted income** or **money laundering**. * You may face inquiries under **Income Tax Act**, **Foreign Exchange Management Act (FEMA)**, and **Prevention of Money Laundering Act (PMLA)**.
### 3. **What type of tax is applicable?**
If we assume the transaction is legal and money legitimately received:
* **Income Tax:**
* The money received will be considered **income or capital receipt**. * If it's treated as inheritance or gift, then **gift tax** provisions (under Income Tax) may apply. * Under current laws, gifts received from non-relatives exceeding Rs. 50,000 are taxable as income. * If inheritance from a legal heir, it is **exempt** under Section 56(2)(x) (gifts from relatives). * However, if no legal heir and money is received without valid reason, IT department may treat it as **income from other sources** and tax accordingly. * **TDS / Reporting:**
* Foreign remittance must be reported under **FEMA**. * Bank will report this transaction to tax authorities.
### 4. **How much tax & on what amount?**
* If treated as taxable income:
* The **full amount received in India** (i.e., \$200,000 minus any payments made to others) will be added to your total income. * Tax will be charged as per your income tax slab rates (e.g., 5%, 20%, 30% depending on your total income). * If considered inheritance from a legal heir:
* It is **exempt** from tax. * If considered a gift from non-relative:
* Amount above Rs. 50,000 is taxable at slab rates.
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### Final Advice:
* Consult a **qualified tax and legal professional** before proceeding. * Verify the authenticity and legal validity of the claim. * Avoid any transaction that seems suspicious or lacks proper documentation to avoid penalties or prosecution.
If you want, I can guide you on the legal route for inheritance or proper remittance under FEMA.
CAclubindia
