Sending large money transfers to India: Tax laws to know | finder.com
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Tax guidelines and regulations for large money transfers into India

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Emigrating, funding a business or helping family abroad? Sending large sums into India can be tricky.

There’s a lot for you to consider when sending money to India. But you can’t avoid the laws and potential paperwork that go along with transferring large amounts of money.

How India regulates large remittances

India is the world’s leading remittance recipient, with more than $10 billion sent from the US to India in 2015 alone. Many providers in the US offer transfer services to India, but your recipient could be on the hook for a gift tax as regulated by the Indian Income Tax Act.

In general, if your recipient is a “blood relative” — including spouses, children and grand-children, siblings or in-laws — they do not pay tax on any amount that you send. Your recipient also won’t pay tax on any money sent as part of an inheritance or a wedding gift.

However, if your recipient is not related to you, any amount over 50,000 rupees (about $750, depending on the exchange rate) that you send is taxable and must be declared as income.

As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.

What are the penalties for not filing a large remittance?

With so much attention on money entering and leaving India, if you fail to report large sums, don’t know you have to report them or don’t report them correctly — it will likely be discovered. Make sure to declare any large remittance as income on your general tax return with the Indian Income Tax Department.

To avoid the severe penalties that could come with a failure to report large sums of money into the country, speak with a professional to guarantee that everything is above board and complies with the laws of both the US and India.

Do I have to report large transfers out of the US?

To be safe, yes. By law, banks report all cash transactions that exceed $10,000 — and any transaction of any amount that alerts their suspicions. Money transfer businesses, which often solely send money between countries, sometimes have reporting thresholds as low as $1,000.
Sending a lot of money out of the country? Know what the IRS expects of you.

How will my recipient receive my remittance in India?

The process of receiving a money transfer in India will vary by provider and delivery method. In general, your recipient will provide ID or a confirmation number for the transaction to receive your funds.

If your recipient owns an account with an Indian bank or money transfer company, they may not need to provide this information each time you send money.
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    26 Responses

    1. Default Gravatar
      nilDecember 5, 2018

      if someone wants to transfer 70000dollars in my account do i need to pay any charges for that transaction

      • finder Customer Care
        ValDecember 10, 2018Staff

        Hi Nil,

        Thank you for reaching out to finder and leaving a question.

        In general, if your recipient is a “blood relative” — including spouses, children and grand-children, siblings or in-laws — they do not pay tax on any amount that you send. Your recipient also won’t pay tax on any money sent as part of an inheritance or a wedding gift.

        However, if your recipient is not related to you, any amount over 50,000 rupees (about $750, depending on the exchange rate) that you send is taxable and must be declared as income.

        Regards,
        Val

    2. Default Gravatar
      seyjalDecember 3, 2018

      my mom friend from the Paris sent some cash to my mom by bank how can she got that money in her account.Is there any proceed to got that money in her account??

      • finder Customer Care
        nikkiangcoDecember 3, 2018Staff

        Hi Seyjal,

        Thanks for reaching out! If your mom’s friend sent the funds to your mom’s bank account, this means that the money is already in her account. To withdraw the money in your mom’s account, you must ask permission from her as it is her own personal account and the bank won’t allow anyone else aside from your mom to withdraw any amount of money from her account without her approval. Hope this clarifies!

        Best,
        Nikki

    3. Default Gravatar
      PankajOctober 15, 2018

      My friend want to help me on buying home in india, and he will send 1.5 lakh every month from France. Do I need to declare anything? As he is sending to my personal account.

      • finder Customer Care
        JoshuaOctober 20, 2018Staff

        Hi Pankaj,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        The answer would depend on different factors. For one, if your friend is a blood relative, then you won’t pay taxes. However, if your friend is not related to you, any amount over 50,000 rupees that he/she sends is taxable and must be declared as income.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    4. Default Gravatar
      rajOctober 9, 2018

      my mom friend from the uk sent some cash to my mom by bank true india amount 25000gbp to malaysia . i would like to know does my mom need to pay tax for the transfer??

      • finder Customer Care
        JoshuaOctober 13, 2018Staff

        Hi Raj,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        That would depend on the nature of the money, how it was acquired, and its purpose. Moreover, it will also depend on whether your mom friend is blood-related to your mom. If the sender and recipient are not related to each other, any amount over 50,000 rupees sent must be declared as income and therefore, should be taxed.

        You would need to speak to a tax specialist to get a more personalized advice.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    5. Default Gravatar
      KaranSeptember 13, 2018

      My frnd want to send 10million dollars to India and invest here . for that I have to pay 58000Rs custom duty and 125500 RS for anti terrorist certificate. Is it true or fraud

      • finder Customer Care
        johnbasanesSeptember 13, 2018Staff

        Hi Karan,

        Thank you for leaving a question.

        There is no limit to bring foreign exchange in India from the US. However, the aggregate value of foreign currency notes in excess of USD 5000 or equivalent and the aggregate value of foreign exchange in the form of currency notes, bank notes or traveller’s cheques in excess of USD 10,000 or its equivalent must be declared to the customs.
        The limit for foreign currency notes is USD 3,000 and must be declare by filing CDF (Currency Declaration Form) if it exceeds the limit. I am not sure on the exact amount that needs to be paid for customs and the anti terrorist certificate but you may contact the Commissioner of Customs office at +91 22 2681 6667 which is open 24/7 for further inquiry on this. Hope this helps!

        Cheers,
        Reggie

    6. Default Gravatar
      KaranSeptember 13, 2018

      How much money can my friend send from Syria to india

      • finder Customer Care
        johnbasanesSeptember 13, 2018Staff

        Hi Karan,

        Thank you for leaving a question.

        There is no limit of sending money to India, provided you pay the required taxes. No limit on daily and monthly transaction. But, there is a limit of $14,000 US dollar equivalent per person per year for tax free transactions. Any amount sent above $14,000 US dollar equivalent per person per year, the sender is responsible for paying the taxes. Hope this helps!

        Cheers,
        Reggie

    7. Default Gravatar
      DevaAugust 7, 2018

      If I receive 5 million dollars of USA should I pay tax ND wanna suffer from for thar

      • finder Customer Care
        JoshuaAugust 14, 2018Staff

        Hi Deva,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        Whether you will have to pay taxes or not depends on different circumstances. Like what our page mentioned, if the money was sent to you by a blood relative or it is an inheritance or gift, then it is most likely you don’t have to pay taxes.

        However, if your recipient is not related to you, any amount over 50,000 rupees (about $750, depending on the exchange rate) that you send is taxable and must be declared as income.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    8. Default Gravatar
      GirishJuly 23, 2018

      I received a transfer amount of 10000 GBP from my friend Yorkshire bank friend sender me a receipt copy to whatsapp now delhi branch bankers asking for 35000 rupees for transfer charges that I made a payment through net banking now they saying your transaction is in process and asking for anti terrorist certificate it costs 70000 rupees is it true or fraud plz suggest me sir

      • finder Customer Care
        JoshuaAugust 5, 2018Staff

        Hi Girish,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        It is true that there are certain laws that apply when receiving a large amount of money. You may need to pay taxes for the money you have received. However, for other fees such as the things you mentioned, you need to verify that with your local government. Speak to a legal expert and see if these fees are really necessary or not.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    9. Default Gravatar
      AshishJuly 14, 2018

      If anybody sent to me 2 thousand of dollar from America then how can I got that money in my account. Is there any process for transecton that money in my account. Plz help me mam

      • finder Customer Care
        nikkiangcoJuly 22, 2018Staff

        Hi Ashish!

        Thanks for leaving a question on our page.

        There are different ways to receive funds from the US and a lot of the providers can transfer the funds directly to your bank account. However, this option generally doesn’t offer the best exchange rates or lowest fees.

        You can check out this page on how to send money to India from the US.

        Hope this helps!

        Nikki

    10. Default Gravatar
      SUNILJuly 9, 2018

      WHAT TYPES OF RULES TO BE FOLLOWED TO TRANSFER AMOUNT FROM MY FIANCE FOREIGN (UK) ACCOUNT TO MY ACCOUNT WITHOUT ANY HURDLE ? IN CASE OF TRANSFERRING HUGE AMOUNT WHAT KIND OF ACCOUNT SHOULD HAVE IN INDIA ?

      • finder Customer Care
        JoshuaJuly 17, 2018Staff

        Hi Sunil,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        I would assume that your fiance would be sending a large amount of money from UK to India. If this is the case, you need to check the regulation for each of the countries. Please be reminded that if your recipient is not related to you, any amount over 50,000 rupees (about $750, depending on the exchange rate) that you send is taxable and must be declared as income.

        In terms of the account, you can use a bank account to receive money from your fiance. There are also some service providers that won’t need you to create an account when receiving money. All you need is to present a valid government ID.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

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    Send to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

    World First

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    TransferWise

    Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.

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