Imagine someone has an NRO account in India from where she/he wants to repat funds for her/his educational expenses. However, owing to the documentation involved and terrible forex rates quoted by the bank, that person is considering to get the money from her/his father who has a normal savings account. Services like bookmyforex are providing much better rates and the documentation involved for resident Indians are much lesser.
The way this is proposed to work is this ->
The daughter/son gifts the money to her/his father without paying tax as this is gift to immediate relative. The father does the outward remittance via bookmyforex or a similar service, pays 5% TCS and claims it back when filing tax the next year.
I have two questions -
1. If the amount to be repatriated is INR 14 lakhs, will sending 7 lakhs each from mother's (dependent on father) and father's accounts count as separate for tax filing purpose? This split is planned because <7 Lakhs does not involve TCS. Why pay tax and claim it back if that can be avoided (present value and headache of claiming back).
2. What can be a potential problem in this transaction considering all the money in both the daughter's/son's and father's accounts is white?