Overview:

When receiving money in India from abroad, there are tax implications that should be considered. Suppose you are sending the money, you double-check how much tax you need to pay when sending money to India in your country/region. Conversely, if you are a resident of India and receive money from abroad, you need to know whether you need to pay taxes on the amount received. In this article, we will address these two issues and more.

What taxes are charged to the sender when transferring from abroad to India?

There is no tax on money sent from abroad to India. None at all. This is because the country already levies taxes on the income received. India has signed double taxation treaties with 85 other countries.

No.	Countries
1	Armenia
2	Australia
3	Austria
4	Bangladesh
5	Belarus
6	Belgium
7	Botswana
8	Brazil
9	Bulgaria
10	Canada
11	China
12	Cyprus
13	Czech Republic
14	Denmark
15	Egypt
16	Finland
17	France
18	Georgia
19	Germany
20	Greece
21	Jordan
22	Greece
23	Jordan
24	Hungary
25	Iceland
26	Indonesia
27	Ireland
28	Israel
29	Italy
30	Japan
31	Kazakhstan
32	Kenya
33	South Korea
34	Kuwait
35	Kyrgyzstan
36	Libya
37	Lithuania
38	Luxembourg
39	Malaysia
40	Malta
41	Mauritius
42	Mexico
43	Mongolia
44	Montenegro
45	Morocco
46	Mozambique
47	Myanmar
48	Namibia
49	Nepal
50	Netherlands
51	New Zealand
52	Norway
53	Oman
54	Philippines
55	Poland
56	Portugal
57	Qatar
58	Romania
59	Russia
60	Saudi Arabia
61	Serbia
62	Singapore
63	Slovenia
64	South Africa
65	Spain
66	Sri Lanka
67	Sudan
68	Sweden
69	Switzerland
70	Syria
71	Tajikistan
72	Tanzania
73	Thailand
74	Trinidad and Tobago
75	Turkey
76	Turkmenistan
77	UAE
78	UAR
79	Uganda
80	UK
81	Ukraine
82	USA
83	Uzbekistan
84	Vietnam
85	Zambia

As per the Double Taxation Avoidance Agreement DTAA between India and any of the above countries, if you have already paid taxes on income earned abroad, you do not need to pay taxes when transferring the money to India
When sending money to India via foreign exchange or remittance services, the only taxes you need to pay are service tax (minor) and transaction fees.

Therefore, if you plan to remit money from overseas to your parents or close relatives for personal expenses, you only need to remit them directly to your savings account in India. There is no additional tax on this amount.

So how much money can you send to India in a year?

There is no limit to the amount you can send to India within a year. All governments obtain funds from abroad to strengthen the economy. India has no restrictions on receiving funds from abroad.
However, other countries/regions may have regulations that limit the amount of money you can send abroad. These rules vary from country to country.

Example: In the United States, there are no restrictions on how you can send money to India.
When you transfer money to your NRE/NRO account or the bank account of your close relatives, it is tax-free.
According to US law, a person’s close relatives are defined as:
Current or former spouse; father, mother, guardian, brother, sister, son, daughter; or
father-in-law, mother-in-law, son-in-law, daughter-in-law, son-in-law, or daughter-in-law.
However, if you want to send money to friends in India, you can send up to $14,000 tax-free per person per year. You must pay US gift tax.

What taxes are required for recipients of Receive Money in India from Abroad?

If the sender is a close relative, no tax is levied.

According to the regulations of the Reserve Bank of India, transfers of foreign persons who are closely related to you are regarded as tax-free donations.

• Close relatives are defined as;

• The individual’s spouse’s brother,

• A Sister’s individual’s spouse’s brother,

• Sister’s brother, sister’s individual’s parent’s brother,

• Sister’s all direct ancestors or

• Any lineal Ascendants, or Descendants of the individual’s spouse.

However, if you are receive money in India from abroad and sender is not related to you, any amount exceeding 50,000 rupees (approximately US$700) will be taxed as income. excessive.

For example, if your friend in the United States gives you 10,000 US dollars as a gift (approximately 700,000 rupees at the current Indian dollar exchange rate), you need to add a surplus of 6,50,000 rupees to your income.

If the donation exceeds $14,000, your friend must pay gift tax in the United States, and you must pay income tax in India of more than 50,000 rupees.

Frequently Asked Questions: Receive Money in India from Abroad

1. Will I be taxed if I transfer money from overseas to general savings account in India?
   If you send money to a close relative, you will not be taxed; however, if you send money to a friend or acquaintance in India and the amount exceeds 50,000 rupees, you will be taxed. Anything over 50,000 rupees is considered income and the recipient must pay Indian income tax.
2. What are the implications of transferring money from India to the United States?
   The tax impact of sending money from India to the US will vary depending on the size of the transfer.
   GST is required for foreign exchange transactions in India.
   Tax on remittance from India to any country.
   1- [up to 100,000 rupees] 45-180 rupees,
   2- [100,000 to 10,00,000 rupees] 180 -990 rupees,
   3- [above Rs.10,00,000] 990-60,000 rupees,
   The maximum tax limit for goods and services in foreign exchange transactions is 60,000 rupees.
3. Do I need to pay taxes on foreign funds transferred to my account?
   When a close relative sends money abroad, you do not need to pay taxes. However, if the money is sent by someone other than your close relatives, an amount up to 50,000 rupees is considered a tax-deductible gift. If the funds in your account exceed 50,000 rupees.50,000 Then you need to add an extra amount to your income and pay income tax.
4. How much money can I send from India overseas each year?
   According to the Free Remittance Program (LRS) of the Reserve Bank of India, Indian residents can remit up to US$25,000 overseas within a fiscal year (April 1 to March 31).

If you need assistance in receiving money in India from abroad, reach out to Chartered Accountants from CA in Delhi‘s homepage