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lending money to father by cheque


 

Hello Experts,

I had a saving of Rs 25 Lacs from salary earned in foreign country.

I transferred the sum of Rs 25 Lac ,from my Indian Saving account to my Fathers Senior Citizen account through checks, 1.5 yrs back.

My Father did a Fixed Deposit of this money.In this mean time ,he earned an interest of Rs 2.3lac (Tax already deducted by bank)

Now I want my money back by cheque, to purchase some property.

So I have a Question:

Q1> Do I have to Pay any tax if my father returns me a of Sum Rs 25 lac only (Which I actually transfered), through cheque. 

Q2> If my father returns me the Sum Rs 27.3 lac (Actual amount + Tax paid Interest earned) by cheque, Do I have to pay any taxes again , if his bank already deducted the tax on interest on Fixed Deposit.

Q3> Please suggest the best possible legal transaction process/mode I can get the money back into my account. 

Thanks

Sanjeev

 
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Sr. ADVOCATE Bombay High Court Mob: 9892432152

Let Shah reply: 

 
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Advocate

Q1> Do I have to Pay any tax if my father returns me a of Sum Rs 25 lac only (Which I actually transfered), through cheque.

Ans, No

Q2> If my father returns me the Sum Rs 27.3 lac (Actual amount + Tax paid Interest earned) by cheque, Do I have to pay any taxes again , if his bank already deducted the tax on interest on Fixed Deposit.

Ans. Not required, however your father must declare the interest income in his tax returns and must offer tax on the said income along with income from any other sources.

Q3> Please suggest the best possible legal transaction process/mode I can get the money back into my account.

Ans. Take an A/c payee check and deposit it in your NRO A/c.

 
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u have to pay tax on Rs.2.30 lacs only . It was your s money temporarily trfd to your father who made FD of that amount & earned interest

 
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AUDITOR

Best option that make a gift deed 27.3 lac. or tell your father make a cheque of  27.3 lac  and transfer/ deposit in your accounts.

Any income/ gift recieved from relatives is not taxable under the Income Tax Act 1961.

The defintion of the term ‘relative’ for this purpose is as under : 

 

(a) husband or wife of individual; 

(b) brother or sister of the individual; 

(c) brother of husband of the individual; 

(d) brother of wife of the individual; 

(e) sister of husband of the individual; 

(f) sister of wife of the individual; 

(g) brother of father of the individual; 

(h) brother of mother of the individual; 

(i) sister of father of the individual; 

(j) sister of mother of the individual; 

(k) lineal ascendant of the individual (say, grandfather) 

 

(l) lineal descendant of the individual (say, son, grandson, daughter) 

(m) lineal ascendant of the husband of the individual 

(n) lineal descendant of the husband of the individual 

(o) lineal ascendant of the wife of the individual (say, wife’s father) 

(p) lineal descendant of the wife of the individual; 

(q) wife or husband of the relatives listed at serial numbers (b) to (p) 

 
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