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Should I Be Worried About Taxes If I Handle Large Cash Deposits for a Friend?

T S Khurana |326 Answers |Ask -Follow

Tax Expert - Answered on Feb 06, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Question by Prateek on Jan 09, 2025Hindi

Money

I receive money on behalf of my friend from many persons and i collect that money in my account (around 30-40k everyday) and send it my friend’s account at once. So will i be taxed on this amount

Ans: It is always better to avoid yourself in getting involved in such transactions. IT Department may doubt these transactions. Once in a while for small amount, it is O.K. BUT never on regular basis.
Advice your friend to get the amount transferred in his account directly online & he should disclose such income in his ITR.
Most Welcome for any further clarification. Thanks.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Every month i transfer 30k to my friend account and my friend return it after 15 day. My salary is taxable.my question do i need the pay the tax on this amount which is 3.6 lac

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Hi sir, I transfered 3 lakhs to my friend in 2023 as loan through bank transfer. If he repay that without any interest in 2024, should I pay income tax?

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Question by nevaansudeep - Feb 05, 2025Hindi

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My brother wants to transfer 15 crores to my account in India from his NRI dubai account, if I receive the amount, should I be liable to pay tax for this amount?

Ans: In India, any money received from abroad is subject to scrutiny under the Income Tax Act.

However, gifts from relatives are tax-free in India.

A brother is considered a relative under the Income Tax Act, so gifts between siblings are exempt from tax.

What You Should Be Aware Of
1) Source of Funds
The money must come from a legal source.

Ensure that your brother can provide proof of the source of funds if required by the authorities.

2) Reporting the Transaction
Large transactions (above Rs. 10 lakh) need to be reported to Income Tax authorities.

If you receive Rs. 15 crores, it may be flagged for monitoring, and you may need to provide explanation and source details.

3) Repatriation Process
Ensure the money is sent through proper banking channels.

RTGS/NEFT/IMPS from an NRI account to your Indian account will ensure the money is tracked properly.

No Immediate Tax Liability for Gift from Brother
If your brother is gifting the amount to you, no tax is applicable as it is treated as a gift from a relative.

However, if the money is for business transactions or repayment of loans, it may attract tax or require documentation.

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Receiving a gift of Rs. 15 crores from your brother is not taxable, as siblings are considered relatives.

Ensure the transaction is done via legal channels and keep all relevant documents.

Reporting large amounts to the Income Tax Department is a good practice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Ans: 01. First of all, calculate LTCG on this transaction, considering Sale Value & Cost of purchase. You both shall file your ITR on the basis of 50% share of LTCG each.
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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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