Sandbpunekar (Homemaker) 17 June 2021

Help to cancer patient from foreign source

My son received Rs5 lakh in ordinary resident savings bank account from foreign from well wisher for cancer treatment. He may get such help from foreign as fund raising is essential. I would like to know whether any compliance, reporting, permission is required from RBI/ Central Govt. to receive funds in large scale. Should he open special account with Bank.

Any Income Tax, Gift Tax obligatio?

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2 Replies

Vasundhara Singh (Student) 19 June 2021

Hello!

Money transfers from abroad can be done in two ways, one from the family members and blood relatives and the other is from unknown individuals in the form of donations. As per RBI rules, if the money is received from close relatives staying abroad, it is tax-free in India.

Close relatives are defined as;

Spouse of the individual

Brother or sister of the individual

Brother or sister of the spouse of the individual

Brother or sister of either of the parents of the individual

Any lineal ascendant or descendant of the individual

Any lineal ascendant or descendant of the spouse of the individual

But if the money is received from any other source than the above mentioned, then any amount over Rs. 50,000 will be liable to be taxed as the receiver’s income. The amount over 50,000 will be added to the income of the receiver and taxed together.

If the donations are done through fundraisers and NGOs, then the beneficiary is not liable to pay any tax and the NGOs can claim deduction o tax under Section 80U of the Income Tax Act. 1961.

Regards

Vasundhara Singh