Cash despatched to mom in India isn’t taxable

Funds sent to your mother in India, will have no tax implications in India, neither for you nor for your mother.

I’m a US-based Indian and ship some cash to my mom in India each month. Is the sum taxable in India?

—Abhay Singh

Below the Indian regulation, revenue tax is levied on any sum of cash, moveable property (specified property akin to shares, jewelry, murals, bullion and others) or immovable property acquired in extra of 50,000 by a person with out consideration (with out a quid professional quo) or for insufficient consideration, besides presents acquired from a “relative” or on marriage or by the use of inheritance or different specified exclusions. Other than partner, the time period “relative” consists of: brother or sister, brother or sister of the partner, brother or sister of both of the dad and mom, any lineal ascendant or descendant, any lineal ascendant or descendant of the partner, partner of any of the particular person referred to above.

Thus, funds despatched to your mom in India, may have no tax implications in India, neither for you nor to your mom. Nevertheless, any earnings on the investments (akin to curiosity or dividends) made by your mom from these funds will likely be taxable in India within the palms of your mom.

I’m an Indian citizen however I work for a non-profit group within the US as a marketing consultant. I’ve a one-year contract and I’m paid in {dollars} which will get credited to my Indian checking account. I must journey to international locations for work. The group doesn’t have an workplace in India. I’m not taxed within the US. How will I get taxed in India?

—Sameeran

Taxability of revenue in India is determined by residential standing, and supply and place of receipt of revenue. In your case, the revenue is acquired immediately into your checking account in India, you’re liable to pay tax in India.

To deposit tax, chances are you’ll comply with the advance tax fee schedule: deposit 15% of whole tax by 15 June; 45% by 15 September; 75% by 15 December and 100% by 15 March.

Any stability tax not paid as advance tax could also be paid as self-assessment tax earlier than submitting the revenue tax return (ITR). Nevertheless, you’ll be answerable for curiosity for delay in deposit or non-deposit of advance tax.

Whether or not you’re liable to be taxed as a “marketing consultant” or as an “worker” will depend upon the character of your contract. If you’re a “marketing consultant”, the revenue will likely be taxable underneath the top “earnings and features of enterprise or occupation”. If you’re an “worker”, will probably be taxable underneath the top “wage”.

Sonu Iyer is tax accomplice and other people advisory companies chief, EY India. Queries at mintmoney@livemint.com

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