TaxTMI 
TaxTMI 
TaxTMI 
Bank wants the repayment from Sudha. Bank does not want any claims from > third party on the titles. > My client was running an industry which ran into problems and ultimately the owner of the industry leaving his wife. The bank is demanding the loan taken by the industry. and the widow dose not have the resouce to pay the lioability. Now, some of her relatives who are staying abroad wants to help her by providing a loan to her to discharge the bank so that she can get back her property which can be sold to repay the loan. Now the question is: 1) Whether she can take laon form the relatives from their NRI accounts and repay the loan after the property is sold and remit back the loan in forewign currency. 2) if so any income tax liability is involved? 3) What is the route to be folowed. Regards S.Manivannan >
Loan from relatives from NRI Accounts
Manivannan Srinivasan
Loan from relatives in foreign currency regarded as genuine loan, not gift, under FEMA borrowing regulations. Funds advanced by relatives from NRI accounts to discharge a domestic bank liability can be treated as a genuine loan rather than a gift if the transaction is bona fide and documented; borrowing in foreign exchange is governed by the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, and tax implications depend on whether the inflow is characterised as a loan or a gift, with gifts from relatives falling under the income tax exemption framework. (AI Summary)
