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I want to remit around Dh20,000 to my close relatives in India for their personal use. Are there any restrictions in respect of the same? Will these relatives be liable to pay tax in India?
-C Kurien, Dubai
Under a circular issued in respect of Money Transfer Service Scheme, a single individual beneficiary can receive a remittance not exceeding $2,500. Under a recent relaxation, the number of remittances has been increased from 12 to 30 in a calendar year.
This amount is exempt from tax in the hands of the Indian beneficiary in the case of a genuine gift, provided it is received by the spouse, brother or sister or brother-in-law or sister-in-law of the individual remitting the funds. It is also exempt in the case of a lineal ascendant or descendant of the remitter or of the spouse of the remitter.
Therefore, if you send remittances as gifts to a person who does not fall in the definition of a relative as mentioned above, the recipient would be liable to tax on such amount received by him which exceeds Rs50,000 in a financial year. Such amount would be taxable as income from other sources under section 56 of the Income-tax Act and the normal rates of taxes would apply, subject to the intial exemption of Rs2 lakhs.
My father-in-law is having litigation in respect of his business income with the tax department in India. The appellate tribunal has decided in favour of the tax department. However, he did not file an appeal to the High Court within the prescribed time. Can he now file an appeal which would be leniently considered by the Court?
-S K Biswas, Doha
Under section 260-A of the Income-tax Act, an appeal can be filed against an order of the income-tax appellate tribunal to the High Court within 120 days from the date on which the order was received. However, power has been given to the High Court to admit an appeal after the expiry of this period. The Court has the discretion to condone the delay if it is satisfied that there was sufficient cause for not filing the appeal within the aforesaid time limit.
It has been held by the Gauhati High Court that a proper explanation must be given for justifying the delay in filing the appeal. The Court will analyse the facts in each case before exercising its discretion.Condonation cannot be made on grounds of sympathy or compassion. If the party in default is guilty of inaction, negligence or indifference, the delay would not be condoned and the appeal would be barred by limitation.
My wife has sold a property in India.The tax officer has not accepted the figure of sale consideration shown in the document of sale. On the basis of some information, he has increased the amount of capital gains on the ground that the sale price was understated. A very large amount of tax demand has been raised and he wants my wife to pay the amount immediately. What remedy does she have?
-R K Saluja, Bahrain
Your wife should file an appeal to the Commissioner of Income-tax (Appeals) within 30 days of receiving the assessment order.She should simultaneously file an application for stay of recovery of demand to the same Commissioner. The Commissioner has the discretion to stay the demand or require payment of part amount of the tax liability.
Courts have ruled that the Commisioner has wide powers, including the power to grant stay against recovery of the disputed demand. Such power has to be exercised judiciously.In fact, some Courts have held that this power should be exercised liberally in favour of the tax payer and the demand should be stayed until the first appeal is disposed of.
Therefore, your wife should press for stay of the demand, provided she files the appeal within the stipulated period of 30 days.
The writer is a practicing lawyer, specialising in tax and exchange management laws of India.
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