Tax on Gift received from foreign relative

1. No tax as per income tax act

2. I guess no limit on receipt of foreign exchange. You will have to check that out.

For foreign exchange remittances, maximum the bank may do a KYC procedure where you have to prove the bonafides of the remittance and that is if their KYC system triggers if receiving such a large remittance in your account. Normally bank's set a trigger in each account at which level they question a transaction. If a salaried person depositing 10000 per month all of a sudden deposits Rs.5 lakhs, the system will alert the bank to verify from the account holder his sources because the banks computer software and transaction records do not justify such a credit to the account. In your case since wife has received gift from father, the remittance certificate should clearly indicate name of sender and you can present the evidence of relationship. There is no limit on the receipt. These are just procedures for Money Laundering Acts that banks may follow and you can satisfy them genuineness of your receipt.

The Income Tax Act has defined father as the relative of the assessee. Therefore no tax on the gift received by your wife from her father. They have not specifically excluded foreign relatives or non resident relatives from the definition. Therefore even these foreign relatives are included in the definition. Therefore no tax on what your wife receives.

Dear Ravi Sir,

No Tax on Gift from Father

Remittance shall be in Rupees as Nepal/Bhutan is rule by Rupees.

No special requirement under FEMA.

However u may need to check out local law of Nepal, whether they restricts such outflow?

Also, your father in law may need to provide purpose of remittance for AML, make sure it goes as gift to his daughter and if possible document the transaction by Gift Deed.

Also, whether the money(rupees) from Nepal is to be converted into designated currency and then to INR or it is directly remitted in INR? Whether you will be hit by any Foreign Exchange converstion load?

Thanks

Any implication if money in australian dollar in deposited at a australian bank a/c in my favour and utilised when i visit . but i stay in india and working . what will be the IT return compulsions