Can nri give money to brother to start a company ?

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Hi All,

I am an NRI and my own brother in India is starting a fertilizer company. He needs 10lacs, can I give or transfer money from my NRE account to his savings account. Do I need transfer this as a gift or as an interest free loan ? Since we are undivided family back in India, can I transfer this as family maintenance (My parents, brothers and sisters)?

What are the official permissions to letter need to provide before I send this as a loan to my own brother ?

 

Regards,

Manju

 

Replies (1)

Hi,

 As per my understanding If you send money from abroad to a normal saving account of your parent, spouse, or children then it will be considered as a gift from Income tax perspective and gift to parent, spouse, and children are not considered as income in India, hence they will not be taxable.  

As an NRI you cannot have a normal saving account but you need to convert it to NRO account.   So there is no question of sending money from abroad to your own normal Indian saving account.

 

You can send money to your NRO account from abroad using online money transfer, wire transfer or any other banking channel. You can even deposit foreign currency cheques into your NRO account. There will be no limit and no questions by the RBI or Income Tax. The amount you transfer is not taxable, neither in abroad nor in India, providing you already paid tax on that income in Abroad.

 

If you transfer money to your NRE account then it’s not taxable at all because you have already paid the tax in the country you earned the money and interest earned on NRE account are not taxable in India

 

 

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