Can anyone please help?

Any help on this will be very helpful

replied in expert section.

Hi Nikhil, Apologies, can you please share where is the revert published in "Expert Section" ? I am not familiar with it

I'll address your concerns regarding the tax implications of receiving a gift from your real brother into your NRO account.

Tax-Free Gift from Brother As per the Income Tax Act, 1961, gifts received from relatives, including brothers, are exempt from tax under Section 56(2)(v).

However, there are certain conditions and limits that apply. Conditions for Tax-Free Gift

1. _Relative_: The gift must be received from a relative, which includes brothers.

 2. _No Consideration_: The gift must be received without any consideration, meaning you shouldn't have paid anything in return.

3. _No Tax Liability_: The gift itself shouldn't be subject to any tax liability. Limitations and Exceptions

1. _Aggregate Value_: If the aggregate value of gifts received during the financial year exceeds ₹50,000, the entire amount is taxable.

2. _Cash Gifts_: Cash gifts exceeding ₹2,00,000 received from a single person during the financial year are taxable.

 TDS on Gifts As per the Income Tax Act, banks are required to deduct TDS at 20% on cash withdrawals exceeding ₹20 lakh in a financial year, or ₹1 crore in the case of professionals and businesses.

 However, this doesn't apply to gifts received from relatives. HDFC Bank's Response HDFC Bank's response stating that amounts above ₹7 lakh are taxable at 20% might be incorrect in this context, as gifts from relatives are exempt from tax.

Documentation and Compliance To ensure compliance and avoid any potential issues: 1. _Gift Deed_: Consider executing a gift deed to document the transaction and establish the gift's legitimacy.

2. _Bank Documentation_: Ensure the bank has documented the transaction correctly, including the gift's nature and the relationship between the donor and the recipient. NRO Account Considerations Transferring funds from an NRO account to a resident account might not provide any tax benefits, as the tax implications would still apply.

check out https://www.caclubindia.com/experts/tds-on-lrs-into-nro-account-deposit-from-real-brother-as-gift--2943029.asp

for convenience, the response is as under:

What is the tax residency status of you and your brother?
If your brother (donor) is non-resident and you (recepient) are resident, then
1. no there is no restriction.
2. It is not taxable
3. it is advisable to have a gift deed.
4. No TDS applies.

If your brother is non-resident and you are resident, then
1. no there is no restriction except for limit of USD 250000 annual limit.
2. It is not taxable
3. it is advisable to have a gift deed.
4. No TDS applies.

Ping me if you need more help on this.