Say cheers to liberal overseas remittances!

While NRIs Are Permitted Bonafide Remittances of Up To $1 Million Even Resident Indians Can Invest or Gift $2,00,000 Each Year 

Q: One of my relatives who is settled in the US for the past many years is in need of some funds there. He has investments in his name in India made prior to his leaving India. Can he transfer any funds from the same to the US. Alternatively, can I send a gift to my relative in US dollars from my funds in India? I request you to advise the best way to transfer the amount in dollars to US without any adverse consequences here.
   Hitesh Bhatt - via sms
A: You can ask your relative to feel assured that his need of funds in the US can be comfortably taken care of without any difficulty. Under its latest master circular No. 03/2007-08, the Reserve Bank of India (RBI) has confirmed that remittance from the balances lying in a non-resident ordinary (NRO) account, up to $1 million per financial year, is permitted for all bonafide purposes, to the satisfaction of the authorized dealer bank. It also needs to be noted that RBI has further instructed banks entitled to deal in foreign exchange to effect all such remittances without approval from RBI.
   Relying on the above, your relative can ask his Indian bank to convert the rupee balance from his NRO account and request for remittance of the desired amount in US dollars in his favour to the credit of his bank account in the US. Of course, he will need to discharge his tax obligation, if any, in respect of the funds being credited to his NRO account for purposes of the remittance and submit an appropriate certificate from a chartered accountant in this regard to his bank.
   Alternatively, you as a resident Indian can avail of the benefit of the liberalized remittance scheme, under which all resident individuals are free to acquire and hold immovable property or shares or any other asset outside India or make remittances towards gift or donation, up to $2,00,000 per financial year without prior approval of the Reserve Bank. Accordingly you can remit up to $2,00,000 at one go as a gift to your relative by requesting your bank to do so.
   
GIFT FROM NRI SON

Q: Reading Taxing Times which is so interesting has prompted me to ask this question. My son, who is in US, wants me to buy a car in India and wants to send equivalent of Rs 4 lakh for the purpose. What would be the best option so that money does not become taxable? Should the car be purchased on his name?
   R S Nigam, Vadodara
A: Glad to know that you like this column. Since the car is to be used by you in India, it would be better to name. He can send any amount as a gift in your name which can be deposited in your account and used by you. A gift of money by a son to his father is totally exempt, irrespective of its monetary value and the destination from where it is sent. Hence you need not worry about any tax liability in respect of the same.

MUKESH PATEL

This NY lawyer provides free legal service to NRG parents :

Prashant Rupera | TNN

Vadodara: It’s a second innings of sorts for New York-based lawyer Ramesh Rawal. After 50 years of practice, septuagenarian Rawal could have easily passed his time with his grand children at his palatial bungalow that his family owns in New York’s Long Island. But Rawal is busy helping solve legal problems faced by NRG parents settled in the United States and that too without charging a single penny.

Rawal, who had practised at the Gujarat High Court for 25 years before shifting to New York in 1983, can enjoy all the comforts that one can dream off. While his elder son is practising in Gujarat HC, his two other millionaire sons are involved in wholesale trade business in the US. Rawal himself has a Mercedes 600 at his service.

But the lawyer, who earlier used to charge US $ 300 per hour from his clients, has started providing free legal service. “It was veryearly in my career that I had decided to provide such free services when I turn 75,” says the 74-year-old lawyer, who holds licence as legal consultant of New York’s Supreme Court. “But I have started following my dream even before I turned 75.”

So while he has helped around 100 senior citizens, whom he met at New York’s Geeta Mandir and Hindu Samaj Temple, during his visit back home, he has promised to help others. On Sunday, when he was invited for a talk by NRI Parents Association (NRIPA), Vadodara chapter, he declared that he was ready to provide free services to them.

“If needed I will spend from my pockets,” says Rawal, adding that the condition of many NRG parents is quite pitiable. “It is like a golden cage for most senior citizens. I have come across some instances where NRIs invite their parents to settle there. Once their parents land in the US, they take away their passports arguing that they would otherwise misplace them. But, it later turns out that such parents can never move out of the US as they are never handed over their passports.” prashant.rupera@timesgroup.com