What are the Tax implication on money transfer from abroad to relatives in India?

Finance
1

Any amount of money sent to your relatives is considered as a gift and no tax is implied to amounts but if one sends money to a person who is not considered as a relative then the amount up to 50,000 rupees in 1 year is Tax and the amount exceeding 50,000 will be taxed as per the income of the receiver. There is no limit on the money that can be sent to India to relatives or non-relatives. One can send as much money as they want to.

2

Tax on Money Transfer to India -

Money can be transferred from any country to India but there are certain tax implications and Rules and regulations that have to be followed when doing an overseas transaction.
India has decided to not levy any taxes on the money that is sent home to relatives or any other family members. To avoid the Double taxation effect India does not take any taxes for remittance of money into India but there is only one tax that has to be paid which is the Service tax and the transaction charges that one will have to bear while transferring the money into Indian currency from any other Foreign currency. Family members can be classified by-

  • You Brother or Sister
  • Your Spouse
  • The Brother & Sisters of your Spouse
  • A Brother & Sister of your Father & Mother
  • Any Linear descendants & ascendants of yours
  • Any Linear descendants & ascendants of your Spouse

All the above categories of people are considered as Relatives and the money sent to them will be considered as a gift and will not be taxed under the Gift tax.

Limit-

There is as such no limit on how much money can be sent to India to relatives or any other members. One can send as much money as they want without attracting any taxes. There is no Cap on the maximum amount of money that can be sent to India until it fulfills the criteria made by FEMA (Foreign Exchange Management Act).

For sending money to any close relative or family member there are no taxes applicable to the receiver as well. Whereas if one sends money to a Non-family member or a friend then there is a total amount up to 700 $ or 50,000 Rupees and any money above 50,000 will be taxed according to the income of the receiver.