Loan from relatives from NRI Accounts

[Manivannan Srinivasan]

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 >

AI Summary

Widow Can Accept NRI Loan to Repay Debt; Must Adhere to Tax and Foreign Exchange Regulations A client, whose spouse owned an industry that failed, faces a bank demand for loan repayment. The widow lacks resources to settle the debt. Her overseas relatives wish to assist by providing a loan from their NRI accounts, allowing her to reclaim and sell her property to repay the loan. The inquiry seeks clarity on whether she can accept such a loan, potential income tax implications, and the appropriate process. The response clarifies that loans, unlike gifts, are permissible if genuine, with reference to relevant tax and foreign exchange regulations.