I must ship some cash overseas (in extra of $250,000) as a financial assist to my son. How do I’m going about with it?
—Name withheld on request
Under the Liberalized Remittance Scheme (LRS), a resident particular person is allowed to remit as much as $250,000 per monetary 12 months for any permitted present or capital account transaction or a mix of each. Any remittance of international change past $250,000 requires prior permission from the Reserve Bank of India (RBI), apart from sure present account transactions viz. (a) remittance prescribed by the nation of emigration (apart from for residence/citizenship by funding schemes), remittance for medical remedy overseas (based mostly on estimate from an Indian physician / international hospital / international physician) and remittance for research overseas (based mostly on estimate from international college).
Thus, in case your remittance case falls beneath any of the above conditions, you’ll not require any prior permission from RBI. If your case falls outdoors these conditions, then you’re required to hunt permission from RBI to remit in extra of $250,000. There isn’t any prescribed type / template for making RBI software to hunt its prior permission; as a substitute it must be made on a plain paper bringing out the exigency in your case.
I’m a senior citizen and resident Indian. I need to present a residential property positioned in Mumbai to my grandson. He is an US citizen holding an OCI (abroad citizenship of India) card. Am I permitted to offer this present? Does LRS restrict of $250,000 apply on this case? Will he be taxed in India on this present?
—Name withheld on request
An OCI cardholder is permitted to obtain present of an immovable property positioned in India solely from a ‘relative’ who’s both a resident or non-resident Indian (NRI) or OCI. The international change laws refer to the current firm legislation definition of ‘relative’ for this function. A grandparent would qualify to be a ‘relative’ for his or her grandchild provided that each are members of the identical HUF (Hindu undivided household). Otherwise, you’ll not be permitted to present the residential property to your grandson with out looking for prior-RBI permission.
Assuming that you just do qualify as a ‘relative’ of your grandson or positively obtain RBI permission on this regard, such present wouldn’t be taxed in his palms since he could be handled as a ‘relative’ beneath the related tax provisions. Since the transaction of gifting of immovable property doesn’t come throughout the purview of LRS provisions, the LRS restrict of $250,000 wouldn’t apply on this case.
Harshal Bhuta is associate at P.R. Bhuta & Co. Chartered Accountants
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Updated: 16 Oct 2023, 09:33 PM IST