Huge Money transfer to India

[mpandi]

Friends,
We are buying a land so i need to transfer around $100 K. If I transfer the whole amount as one chunk would it create a problem ?

As all you know about the Indian real estate transactions, the seller wants us to register the land for much lesser than actually we pay ?

What are the consequences in terms of Income tax issue & repatriation issue ?

Please let me know of any other issues I should be aware of.

Please advise. Your help is highly appreciated.

-svraj

[manuchabria]

[QUOTE]We are buying a land so i need to transfer around $100 K. If I transfer the whole amount as one chunk would it create a problem ?

Is there any specific problem you are expecting when you tranfer transfer this ?

[mm2008R2I]

Open a savings bank account on your name in India. Transfer the money from your US account to Indian bank account 30K, 30K and 40K every 10 days. No one will ask you any detials. Actually, even 100K at once is not a problem. I transferred huge amounts lot of times. As long as it is your account, no one cares.

If you sell your land and get 300K, making 200K profit, then you'll have a problem in depositing that money into your account. You can put 100K back very easily.

There are several reasons in using that money as you could gift someone, do shopping, spend it on vacation. Indian govt will not ask the details.

[mpandi]

Is there any specific problem you are expecting when you tranfer transfer this ?[/quote]

Thanks for your reply.

I am going to transfer this amount to our NRE accounts in my name & my wife's name. However, my FIL is going to withdraw this amount to pay for my land transaction. Since the land registeration amount is going to be much lesser than transferred amount.

Would my FIL need to show the difference as his income (from us) while filing Indian Income tax ? Currently he is retired so doesn't earn that much money to file Income tax.

Note : - My major concern is the difference between land registration amount & the amount going out of our NRE account. Will the Income tax official ask what happened to the difference and where.

Please advise. Your inputs are highly appreciated.
-svraj

[layman]

Thanks for your reply.

I am going to transfer this amount to our NRE accounts in my name & my wife's name. However, my FIL is going to withdraw this amount to pay for my land transaction. Since the land registeration amount is going to be much lesser than transferred amount.

Would my FIL need to show the difference as his income (from us) while filing Indian Income tax ? Currently he is retired so doesn't earn that much money to file Income tax.

Note : - My major concern is the difference between land registration amount & the amount going out of our NRE account. Will the Income tax official ask what happened to the difference and where.

Please advise. Your inputs are highly appreciated.
-svraj[/quote]
If you are worried ask your FIL to withdraw cash. Provide your ATM to him so that he can withdraw the max limit every day.

[rk888]

Thanks for your reply.

I am going to transfer this amount to our NRE accounts in my name & my wife's name. However, my FIL is going to withdraw this amount to pay for my land transaction. Since the land registeration amount is going to be much lesser than transferred amount.

Would my FIL need to show the difference as his income (from us) while filing Indian Income tax ? Currently he is retired so doesn't earn that much money to file Income tax.

Note : - My major concern is the difference between land registration amount & the amount going out of our NRE account. Will the Income tax official ask what happened to the difference and where.

Please advise. Your inputs are highly appreciated.
-svraj[/quote]

I recently transferred the same amount and used for the same purpose. You can transfer USD to your FIL/MIL accounts as a gift. You can withdraw cash from your NRI accounts as well as your FIL accounts. Legally you can gift 12K (USD/year/person) to your relatives. I guess there won't be any problems with income tax officials.

[shapra]

While you should consult a good lawyer and an accountant, here's what I understand:

1. Registration authority is concerned about what value you put on the document. If you undervalue it, you will be in trouble. Usually, the sub-registrar's office will advise you on the safe value
2. Income Tax should not care what you spent on land registration. Their concern will be where you got this money from. Since you are getting money out of an NRE account, the source of money is clear.
3. Paying the seller will be the problem. Since seller doesnt want to list the market value on the document, I doubt s/he will take a NRE check. If your FIL withdraws a huge amount of cash, this might be a worry.
4. When you decide to sell said property, you will have higher capital gains and therefore more tax to pay. (Example: You register a 1 crore property for 50 Lakhs and later sell it for 2 crores)

Note : - My major concern is the difference between land registration amount & the amount going out of our NRE account. Will the Income tax official ask what happened to the difference and where.
-svraj[/quote]

[MadMax]

If you are worried ask your FIL to withdraw cash. Provide your ATM to him so that he can withdraw the max limit every day.[/quote]

This is way too cumbersome. 20K is the limit per day. If you need to withdraw 10 lacs it will take 50 days. Might also trigger some kind of monitoring and account might get frozen. Also tension about keeping all that cash at home during that time.

Just withdraw cash with a check. My cousins did that for me and we haven't had any problem. PAN number was needed to withdraw anything greater than 50k I think.

[reinvestor]

This is way too cumbersome. 20K is the limit per day. If you need to withdraw 10 lacs it will take 50 days. Might also trigger some kind of monitoring and account might get frozen. Also tension about keeping all that cash at home during that time.

Just withdraw cash with a check. My cousins did that for me and we haven't had any problem. PAN number was needed to withdraw anything greater than 50k I think.[/quote]

I recently transfered 60K over a period of 4 weeks(ICICI transfers 15k/week).Had no problem.Back in Hyd FIL withdrew 4Lacs(one time) and gave the cash to builder and had no problem.
The builder gave a received statement on a piece of paper (not legal paper) as is wont in India.

[andprop]

I recently transferred the same amount and used for the same purpose. You can transfer USD to your FIL/MIL accounts as a gift. You can withdraw cash from your NRI accounts as well as your FIL accounts. Legally you can gift 12K (USD/year/person) to your relatives. I guess there won't be any problems with income tax officials.

rk888 ,

You mentioned "Legally you can gift 12K (USD/year/person) to your relatives" . Do you by chance have any document explaining that
i need to transfer some money and didnt want to get into this issue

Thanks
andprop