Loan from NRI to resident parent

Venkat (Newbie) (41 Points)

29 March 2023  

Hi, I am an NRI and have some cash in my NRO account in India. The source of these funds is from my remittances from my post-tax overseas income.

I am looking to transfer this as a lump-sum to my father as a loan. He is a retired person with pension income. He is an income tax assesee for his pension income and investment income. 

He may return it to me in the next 1-2 years through payment to my NRO account. I will not be doing overseas repatriation of this repaid amount. I will use it for my expenses and investments in India or retain it in my NRO account. 

I have the following questions:

1. Is there any restriction/prohibition on me (as an NRI) making a loan (approx 15L) to my resident father like this? 

2. Is there any permission required from RBI or any other authority?

3. Does my father have to declare this loan in his IT returns? 

4. Should a loan agreement be done for this on stamp paper?

5. When my father returns the amount as repayment, will this attract any TCS if it is returned to my NRO account and I don't repatriate the amount overseas?