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Will I have to pay tax in India when my friend transfers money to my bank account in India from US? The amount is $100 USD, and at this time I don't know how the transfer will occur.

I am living in India I have an savings account in Syndicate Bank in India.

Is this amount a taxable transaction? Is there a specific procedure I can follow to avoid a tax (or at least minimize my obligation if there is one?)

  • Suyash - welcome. It is difficult to know without some more detail. Please use the search to find similar issues to your own. If, after a good search, you still have a question please ask again. – MrChrister Nov 9 '13 at 6:45
  • I want to say that, I am live in India I have an savings account in Syndicate Bank in India. He is sending me some money from US . Will I have to pay tax to Bank? – Suyash Jadhav Nov 9 '13 at 7:52
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    Good! Getting there! Why is your friend transferring money? Did you work for him? Did you sell him something? How large is the amount? Is it a wire transfer from his bank? – MrChrister Nov 9 '13 at 8:18
  • He helping me for Operation of my friend . He sending 100 dollor. I dont know how he sending. – Suyash Jadhav Nov 10 '13 at 8:08
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As much as I understand you friend is giving you $100 [Say Rs 6000] as gift.

There are 2 taxes;

Service tax: If your friend is using Remittance service. Around 0.12% of amount Rs 6000/-. Around Rs 7.20/-. Normally deducted from Rs 6000.

Gift Tax: The transfer is treated as Gift to you as its from Non-Relative, without any occasion. If the amount of Gift is more than Rs 50,000 a financial year, then you have to pay tax as per your tax slab for the entire amount. As the transfer in question is less than Rs 50,000 there is no tax liability.

Further you are paying this to your friend, which again is looked upon as a Gift and if you friend receives more than the specified amount.

protected by Chris W. Rea Nov 28 '16 at 20:36

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