[eternalck]

Hi.. I have a specific question which I could not find the exact location where to ask so asking here.. please move to a more suitable subforum if required.
I am a non resident Indian planning to gift an SUV to my brother who is in Delhi, working in a MNC. No special occasion.
Will it attract tax liability for him? Anybody with any experience of a similar situation? Any recommendations appreciated.

Thanks!

[Tapish]

First up, I'm going to share this with my brother

Gifts to blood relatives are Tax exempt so you should be good.

[Ironhide]

Do you need another brother?








Just asking.

[Cyborg]

Originally Posted by eternalck

Will it attract tax liability for him? Anybody with any experience of a similar situation? Any recommendations appreciated.

Ask your brother to speak to a Chartered Accountant, there is a specific verbiage which needs to be used in the letter which you need to post/courier to him. It goes something like this “Out of natural love and affection to you as your brother, I am gifting you (free text)”. Also mention your bank name, address and account number in the letter.

Please check the exact wordings, your gift to him as a blood relative is tax free for him, whether it’s cash to his bank account via transfer from your NRI account or in your case a car.

Cheers

[GTO]

Here's what my CA says:

For blood relation = real brother = gifts are exempt.

No income tax if gift is received from brother

[sunilch]

Originally Posted by eternalck

Hi.. I have a specific question which I could not find the exact location where to ask so asking here.. please move to a more suitable subforum if required.
I am a non resident Indian planning to gift an SUV to my brother who is in Delhi, working in a MNC. No special occasion.
Will it attract tax liability for him? Anybody with any experience of a similar situation? Any recommendations appreciated.

Thanks!

Only Gits to blood relations are exempt form tax. Also, since you are an NRI, I guess it will not be easy for you to buy it directly and maintain the car later on your name. So better to gift the amount directly to him and let him buy the car.

[r-a-s]

Gifts received from relatives are exempt from tax. According to the IT Act, following persons would be considered as relative ​--spouse, brother or sister, brother or sister of the spouse, brother or sister of either of the parents, any lineal ascendant or descendent, any lineal ascendant or descendent of the spouse, spouse of the persons referred above.

[matizcrazy]

Originally Posted by r-a-s

Gifts received from relatives are exempt from tax. According to the IT Act, following persons would be considered as relative ​--spouse, brother or sister, brother or sister of the spouse, brother or sister of either of the parents, any lineal ascendant or descendent, any lineal ascendant or descendent of the spouse, spouse of the persons referred above.

This is the correct definition of relative as per the Income Tax Department.
Cousins don't figure but brothers and sisters of parents do, ie the father or mother of the cousin.

[heydj]

I think there are work arounds to avoid taxes etc and would advise speaking with a CA.

If you would see lot of Movie producers in lieu of fees give cars to actors this helps actor avoid paying taxes on fees and I am sure producer is also saving money.

So I am sure there is a loophole / a way. Speak with financial consultant.

[eternalck]

Originally Posted by Ironhide

Do you need another brother?

Just asking.

One is enough. Trust me.

Originally Posted by Tapish

First up, I'm going to share this with my brother

Do share!

Originally Posted by Cyborg

Ask your brother to speak to a Chartered Accountant, there is a specific verbiage which needs to be used in the letter which you need to post/courier to him. It goes something like this “Out of natural love and affection to you as your brother, I am gifting you (free text)”. Also mention your bank name, address and account number in the letter.

Please check the exact wordings, your gift to him as a blood relative is tax free for him, whether it’s cash to his bank account via transfer from your NRI account or in your case a car.

The dealer also mentioned this to be sent to them in am email. Will confirm the exact language. Thanks!

Cheers

Yes the dealer mentioned something on similar lines to be sent to them, I'll check the correct legal language and we should be good. Thanks!

Originally Posted by GTO

Here's what my CA says:

Thanks for the information GTO. A solid quote which has solved many problems for us!

So a 4x4 Endeavour it is for him! Having driven the expedition extensively, we both are on the same page that the endeavour is what comes closest to that experience in India for now.
Supplies appear to be impacted perhaps due to chip shortages at present and with all the Ford drama in India it's certainly not a great time to buy it, I know, but our hearts .

And yeah I just saw the twin turbo being tested thread, talk about mixed messaging. That being said, the power is more than enough for highways as well as some mild off-roading so it fits the bill.

[eternalck]

Originally Posted by sunilch

Only Gits to blood relations are exempt form tax. Also, since you are an NRI, I guess it will not be easy for you to buy it directly and maintain the car later on your name. So better to gift the amount directly to him and let him buy the car.

Yes it will be under his name. However, I will be directly transferring the amount to the dealer from overseas.

[SideView]

Originally Posted by eternalck

Yes it will be under his name. However, I will be directly transferring the amount to the dealer from overseas.

Has your brother done the PDI ( use the team bhp check list)? Isnt only the booking amount required intially?

I would recommend only transfer of the whole amount after PDI.

[the pony]

Originally Posted by eternalck

Hi.. I have a specific question which I could not find the exact location where to ask so asking here.. please move to a more suitable subforum if required.
I am a non resident Indian planning to gift an SUV to my brother who is in Delhi, working in a MNC. No special occasion.
Will it attract tax liability for him? Anybody with any experience of a similar situation? Any recommendations appreciated.

It would be tax exempt, however the TCS would be deducted under his PAN and he would need to file it in his next ITR. Since it is filed in his ITR, the IT department can ask for an explanation till 4 years post completion of assessment year.

[sunilch]

Originally Posted by eternalck

Yes it will be under his name. However, I will be directly transferring the amount to the dealer from overseas.

Then there is no question of any Gift or Tax here. The car will belong to him and you have paid directly to the Dealer. Make sure all receipts (GST or TDS or whatever taxex), invoices, etc are in your brother's name.

[matizcrazy]

Originally Posted by eternalck

Yes it will be under his name. However, I will be directly transferring the amount to the dealer from overseas.

While I am no expert on tax laws, I remember being told by the salesperson that the NEFT / cheque has to be from the bank account of the person in whose name the car will be registered. In fact, they insisted the same for even road tax, registration payment; also they wanted PAN and Aadhaar of the potential buyer and owner.
High likelihood of attracting an IT notice, specially if the money is paid from a foreign source or NRE account.

Simpler to transfer the money to the brother ( no tax restrictions) and let him buy it.