Hello Everyone,
My family member is in need of some money and I want to transfer around 10 lakh through RTGS to his saving account. He/she would return this money to my bank account either this financial year or next. I would like to know if it is legal to transfer such amount as loan or gift or help to relatives. If yes, what are the tax implications I should be aware of and be ready for?
Thanks for your help/suggestions.
1. Yes, there should not be any problem. Transfers made to family members would not come under tax implications and make sure the relative you are transferring money comes under "Relative" definition under the income tax act.
2. Make sure you have a proper source for such amount and if it is given as loan then interest on a loan received will be taxable under Income from other sources.
3. For mere transfers, there will not be any tax implications and make sure the account is not a salary account.
Please correct me if the above solution has an alternative view.
Chirag N Shah & Associates
Mumbai
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