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My son lives abroad and often sends money to the bank accounts of my wife and myself. Are such amounts taxable in our hands? Also, what is the  limit for such remittances?

—Name withheld on request

According to the Income Tax Act, 1961 any sum of money an individual receives from their children is not taxable.

Children are covered under the exempted category of ‘relative’ as defined under the I-T Act. Hence, money received from your son by your wife or yourself is not taxable in either of your hands.

Further, there is no limit on amount permissible to be remitted from outside India to your bank account in India. However, it may be noted that Indian tax authorities may sometimes question source of this income in hands of your son (i.e. the remitter). In that case, necessary documentation may need to be submitted by your son to the Indian tax authorities to substantiate that such income was earned outside India and no portion of such income accrues or arises in India.

Further, if you son qualifies as an Indian tax resident due to number of days of his stay in India in any particular year, then his global income may be subject to tax in India and detailed examination of his residential status and taxability of his global income in India may be required.

Further, money received from someone other than your relative (spouse, brothers, sisters, parents, lineal ascendants/ descendants of taxpayer etc) is taxable if the aggregated of such money exceeds 50,000 during a year.

Shailesh Kumar is partner, Nangia & Co LLP. Send your queries to mintmoney@livemint.com

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