I am planning to transfer around $8K-10K in my parent's bank account(Joint bank a/c) in India . I have read a lot of posts(like Will I have to pay taxes in India when I transfer money from a US bank to an Indian savings account?) but I am still not sure if my parents will need to pay taxes on the money that I send them since it is not a NRI/NRE/NRO account?
Any inward remittance received by your Parents cannot be treated as "Income" as per the definition. This can at best be treated as "Gift". However, in India there is No Gift tax for certain relations and there is no ceiling on the amount. In your case, gifting of money by son to father or vice versa is allowed without any limits and tax implication. However if your father were to invest this money in his name and make gains, the gains would be taxable.
However if the Money is being transferred with a specific purpose such as to buy a property, etc make sure you have the Bank give your dad a Certificate of Inward remittance. This is also advisable even otherwise, the Inward Remittance certificate from Bank certifies that the credit entry in the account is because of funds coming into India and if the tax authorities were to question the large amount of credits, it would be proof that it is due to Inward remittance and not due to, say, a sale of property by your dad.
What your father does with the money is treated as EXPENSE, i.e. spends on day to day expense or pays off your Loans or pay off his loans have no relevance from a Tax Perspective in India.
The only issue comes in say you have transferred the funds to buy a property and there was no purpose of remittance specified by Bank's letter and one wants to repatriate this funds back to US, then it's an issue.
If you transfer the funds directly to your Loan account, again there is no tax implication to you in India as you are an NRI.
protected by Chris W. Rea Feb 13 '16 at 0:22
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