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.