The amount that you intend to remit can be treated as a gift made by you to your daughter. As per Section 56 of the Income Tax Act, the value of gifts received is not taxable in the hands of the recipient as long as the aggregate value of all the gifts received during the financial year does not exceed fifty thousand rupees. Once the aggregate of gifts received exceeds the threshold of fifty thousand rupees in a financial year the full value of all the gifts are treated as income of the recipient. However, gifts received from certain specified relatives are not treated as income irrespective of the amount. Father is included in the definition of specified relatives and thus it will not be treated as her income.
This transaction also does not have any tax implications for you. RBI allows every resident Indian to remit up to 2.5 lakh $ every year under the Liberalised Remittance Scheme (LRS) for specified purposes including for maintenance of your relatives.
You need to approach your bank for this purpose and they will help you with the procedure to be followed for remittance of money to your daughters abroad. The latest budget has proposed tax collection for remittance made under LRS and therefore the bank may collect additional money as TCS(Tax Collection at Source) which you will be able to claim against your tax liability while filing your ITR next year.
Balwant Jain is a tax and investment expert who can be reached at jainbalwant@gmail.com and @jainbalwant his X handle.
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