Gift of foreign currency received from nri son

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 October 2017 Sir,
Please, give your kind opinion for below mentioned questions :

An NRI sends 3,000 US Dollars from a foreign country to his mother in India.
He sends this amount with his friend , who is also an NRI, and coming to India for a short period.

This foreign currency is sent to his mother as A GIFT FROM A SON TO HIS MOTHER.
The mother now exchanges the foreign currency - US Dollars, in her own name, by filling her own name and other details in forms, showing the currency as her own .
She gets the exchanged amount credited in her bank a/c, after deduction of exchange fees.

Questions :
1) Is this kind of transaction valid and allowed in the eyes of laws and rules ?

2) - Can an NRI send and gift foreign currency, in this way, to his relatives in India ?
- Can such NRI’s relative in India, exchange such gifted foreign currency in India, in his/her own name ?

Is it ok ? Can they do this ?

3) Will such gift transaction need any written documentation ?
- If Yes, then how can it be possible, in absence of NRI? Because he is in foreign country.

4) Is this amount taxable in the hands of mother ?

5) Will the mother have to show this amount in her Income tax return ?
- If Yes, Where to show it ? - Under which head ? By writing what particulars for it ?

6) If she shows this amount in her income tax return, then which ITR form she will have to use ?
ITR-1 OR 2 OR 3 ?
(She has only bank interest and FD Interest, as other incomes. No any salary or any other income.)

Please, clear these confusions.
Thanks in advance.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 1. Transaction in nature of gift. So valid legally even if sent through a non relative as the intention is to gift mother

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 2. Yes. The gift given to relative can be exchanged this way in his/her own name. No restrictions

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K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 3. Amount involved is not higher. Moreover, the IT Act doesnt mandate any form of agreement or gift deed as requirement for gift. The sender may even write a simple email/letter acknowledged by the receiver of this gift.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 4. Gift from relatives, resident or non resident, is exempt

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 5. Gifts can be shown in ITR under exempt income. No mandatory requirement if the mother doesnt have any taxable income.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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09 October 2017 6. ITR 1 will be enough......

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Querist : Anonymous

Querist : Anonymous (Querist)