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INCOME TAX LIBERALIZED REMITTANCE SCHEEME

Tax queries 228 views 2 replies

My Friend has sent Rs. 15.00 Lakhs under LRS scheme to his son during 2018-19 for studies, he has not filed return in the previous years, the money sent is from his savings in house and banks and also borrowed from relatives. He has received notice from Income tax stating his PAN has been flagged directed to file return for 2018-19, he has filed return stating the money sent is income from other sources what are his tax liability please clarify 

Thanking you

R.S.K.Singh 

.

Replies (2)
It means he has deposited cash amount in his bank account. I think that it is being shown in the compliance portal. In my opinion go to any tax professional and get all the entries checked and file a return of income.

Dear Expert,

Thank you sir, you are right the ADI Bank has asked him to deposit the money in his savings amount Rs. 10.00 lakhs  and later permitted him to buy Foreign exchange, by separately getting money of Rs.10..0 Lakh  and as per FEMA exemption, he is permitted to remit only his own funds not borrowed funds, the ADI has responsibility to verify this whether the funds are borrowed or own by properly versifying his previous IT Returns, if money remitted is not he is liable for violations FEMA and if money shown now is first time does it violate income tax liability and also does it attract PML Act , please clarify, my friend has simply filed a ITR showing the money sent his savings of previous years, is he liable to pay Income Tax for the amount remitted now for the year 2018-19 along with fine etc. My final doubt is

1. what is link section between FEMA Income Tax act and PML act.

2. does money not his own funds borrowed from others attract PML act.

3. declaring for the first time in ITR Return a huge money of Rs. 10.00 lakh as his savings without any proof of documents is liable to pay income tax and fine.

Money is sent from not  an foreign exchange account 

Thank you 


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