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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Failing to file could land both you and your recipient in tax trouble.

If you’re sending more than $700 to someone in India who isn’t a blood relative, they’ll need to report it on their taxes — and you may need to report it to the IRS regardless of how you know them.

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 $700, depending on the exchange rate) that you send is taxable and must be declared as income.

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What are the penalties in India if my recipient fails to file?

If you don’t report a transfer on your taxes in India, you could be charged a 10%, 50% or 200% penalty on the taxes owed, depending on whether it was considered intentional or not.

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?

Generally, yes — though it depends on how much you’re sending and for what purpose. Gifts over $15,000, business transactions over $10,000 and any foreign account in your name that’s held more than $10,000 in the past year will need to be reported on your taxes.

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 much money can I send to India?

There’s no legal cap on the amount of money you can send, but some transfer providers will set their own limits. If you’re planning on initiating a large transfer, use a limit-free provider such as XE.

How will my recipient in India get the money?

Your recipient can pick up the cash in person or have the money deposited directly into their bank account or mobile wallet. Not every provider will offer all three options, so check before initiating a transfer.

In general, your recipient will provide ID or a confirmation number for the transaction to pick up the money in cash.
How to send money to India

Bottom line

If you’re sending money to a relative in India, they won’t have to worry about taxes — but if you’re sending money to a friend, they’ll need to report anything over ₹50,000 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.

Frequently asked questions

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30 Responses

  1. Default Gravatar
    JaneFebruary 3, 2019

    My sister is transferring some Euros to India via Transferwise, is that money taxable in India?

    • finder Customer Care
      JhezelynFebruary 4, 2019Staff

      Hello Jane,

      Thank you for your comment.

      When you send money to India from an online remittance service, you will not be required to pay taxes on that amount if you are an NRI. However, if you are not an NRI then you will have to pay taxes on the global income.

      An NRI can transfer funds from UK to India in his NRE account securely and conveniently. NRIs don’t have to pay taxes when they transfer money to India. Since they already pay tax on the amount earned in the country where they are working, they are not required to pay further tax on the same money. This is irrespective of whether they keep the money in Indian Rupees or Euros.

      Regards,
      Jhezelyn

  2. Default Gravatar
    VictoriaJanuary 18, 2019

    If money transfer from Canada to India at around $355,000, does it transfer directly to the account of the Indian beneficiary?

    • finder Customer Care
      JeniJanuary 18, 2019Staff

      Hi Victoria,

      Thank you for getting in touch with finder.

      Basically, international bank transfers automatically send funds to the receiver’s bank account. However, transfer fees and exchange rates apply to the transaction, so it’s worth comparing specialist online money transfer companies to see if you might be able to find a better deal.

      I hope this helps.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

US International Money Transfers Offers

Important Information*
XE Money Transfer

Transfer up to $500,000 with no minimums and no fees.

WorldRemit International Money Transfers

Use promo code FINDER to send your first transfer with no fee.
Send to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

TransferWise

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

CurrencyTransfer

Minimum transfer: $5,000. For larger transfers, take advantage of no transaction fees and no maximum send limits.

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