Dear All,
I have a query with regards to Personal Funds we receive from relatives and friends from abroad through Agency’s like Western Union or Money Gram.
1. Is there any limit for the amount to be received in a year.
2. Is there any Tax to be levied on this amount or upto what amount.
With Regards
Manish Justin Khan
Accounts Officer
Adventist Development and Relief Agency India (ADRA India)
Dear Manish,
I think you have rec’d a comprehensive response from all the respondents. Hope your query has been solved. Regarding tax, as mentioned by Zulkef, as long as Gift is of personal in nature and from relative, it will not be taxable, otherwise Gift Tax becomes applicable for amount above Rs 50,000. However you will need to have proper evidence that amount rec’d is a Gift.
Relative for tax purposes is not same as relative for FCRA purpose. Please do check the relevant clause.
Dear Manish,
Greetings from Hyderabad!
1. We should understand the definition relative under the FCRA 2010. The term has not been defined in FCRA 2010 but the Act states that it shall have the same meaning as provided in section 2 of Companies Act 1956. As per the Companies Act 1956, the relatives are as under:
a. Father
b. Mother (including step mother)
c. Son (including step son)
d. Son’s wife
e. Daughter (including step daughter)
f. Father’s father
g. Father’s mother
h. Mother’s mother
i. Mother’s father
j. Son’s son
k. Son’s son’s wife
l. Son’s daughter
m. Son’s daughter’s husband
n. Daughter’s husband
o. Daughter’ son
p. Daughter’s son’s wife
q. Daughter’s daughter
r. Daughter’s daughter’s husband
s. Brother (including step brother)
t. Brother’s wife
u. Sister (including step sister)
v. Sister’s husband
2. An amount of upto Rs. 100000/- need not be informed to FCRA. Beyond that information in FC-1 should be sent within 30 days.
3. It should also be noted that contribution received from a citizen of India living in another country, from his personal savings, through the normal banking channels, is not treated as foreign contribution eg. NRI. So note that amount received through Western Union is not permissible as it is a non banking channel.
4. Even if you were to receive FC, you should not be falling under the definition of persons debarred from receiving FC.
5. If it is an article from outside India, it is exempt upto the market value of Rs. 25000/-
6. I am not too sure of the taxation part, but I understand any income that we receive is taxable.
I may not have given a very clear answer, so would request other inputs as well.
Thanks and regards,
_____________________________________
B V Soma Sastry
Director – Finance and Admin
Centre for World Solidarity
12-13-438, Street No. 1, Tarnaka
Secunderabad 500 017
Andhra Pradesh
If the receipt is supported by document of Gift or Loan or advance, then it may not be added to income
Friends,
Referring to the query given here, what is not clear is the nature of the foreign fund received in the personal account. Is it for fee/salary or payment towards services? In these cases, they may not come under FCRA.
However, if the receipts are in the nature of funds received from relatives, they will be governed by Rule 6 of FCRA Rules dt. 29th April, 2011 which imposes a limit of Rs. 1 lakh beyond which you have to inform FCRA authorities through Form FC 1.
As for taxability, the receipts will have to be clubbed with income, I suppose. Can someone elaborate on this angle?
Thanks.
Kt
(T.Kaithang)
Finance Director,
Emmanuel Hospital Association,
808/92, Nehru Place,
New Delhi. PIN 110019