Skip to content

menu

Cyril Amarchand Mangaldas logo
homeabout usexpertisepeoplecontact
RSS LinkedIn Facebook Instagram Spotify
Search
Close

Private Client

Home » How to send money to your adult children living abroad

How to send money to your adult children living abroad

By Rishabh Shroff & Chirag Shah on May 31, 2023
Posted in Personal Finance, Tax, Trusts
Listen to this post
Personal Finance
Source: Livemint.com

The following article was first published in the Mint newspaper on 30th May, 2023. The same was written by our Private Client team at Cyril Amarchand Mangaldas, who frequently publish their comments and opinions in the Mint. The online version of the article can be found here.

I have a son (17) and daughter (21). My daughter plans to go abroad for two years. I have two queries: i) How much money can I send her in a year, and can it be every month or does it have to be once a year? ii) I have created a private trust for the benefit of my children. Can I send the money through a private trust?

—Name withheld on request

The Liberalised Remittance Scheme (LRS) is available to all resident individuals in India to remit up to $250,000 per fiscal year. There is no restriction on the frequency of remittances under LRS. That said, the aggregate amount in one financial year must not exceed $250,000. Furthermore, from 1 July, tax collection at source (TCS) on the LRS will increase from 5% to 20% for remittances. Therefore, you can send money to your daughter every month as long as it is within this annual limit. Note: at the time of remitting the amounts, the authorised dealer bank will require you to undertake certain compliances such as payment of 20% TCS and submission of form A2, under which the nature of transaction must be declared by you.

Regarding your second query: You have created a private trust and seek to remit funds from the trust’s account. But, LRS is not available to trusts. Hence, you will have to remit the funds from your bank account, and not from the account of the trust.

My son is an NRI living in Germany. He does not plan to come back, and started his own business there. I want to gift him a portion of my savings. Can I transfer a lump-sum amount from my savings account to his overseas bank account as a gift?

—Name withheld on request

LRS allows a resident individual to make a rupee gift to an NRI close relative (a ‘relative’ is as defined as under the Companies Act, 2013) of the resident individual by way of crossed cheque or electronic transfer. Your son is regarded as your relative under the Companies Act, 2013, and hence, you can transfer by way of a gift a lump-sum amount from your savings account in India to his overseas account.

However, do note that such gift amount should be within the threshold of $250,000 per financial year as permitted for a resident individual under the LRS. Considering that with effect from 1 July , the TCS on all remittances under LRS will be increased from 5% to 20%, it will be worthwhile to factor in the actual amount to be gifted on the basis of the additional cash outflow towards TCS.


Tags: Liberalised Remittance Scheme (LRS), NRI, Overseas Bank Account, Personal Finance, Private Trust, Tax, TCS
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Rishabh Shroff Rishabh Shroff

Co-Head and Partner in the Private Client Practice at the Mumbai office of Cyril Amarchand Mangaldas. Rishabh specialises in family constitutions and settlements, trusts, wills and succession planning. He can be reached at rishabh.shroff@cyrilshroff.com

Read more about Rishabh Shroff
Photo of Chirag Shah Chirag Shah

Principal Associate in the General Corporate-Private Client Practice at the Mumbai office of Cyril Amarchand Mangaldas. He can be reached at ck.shah@cyrilshroff.com

Related Posts
Can a married woman set up a HUF with just her parents?
August 9, 2023
Leaving on Jet Plane – Key Legal Considerations for Business Owners Migrating Abroad
April 27, 2022
Your Succession Toolkit
April 5, 2022

Stay Connected

RSS LinkedIn Facebook Instagram Spotify
Subscribe to this Blog

About

A thought leadership initiative dealing with multidisciplinary aspects of family business and governance (intra family as well as vis-à-vis corporate entities), estate and succession planning (including non-resident legal and tax considerations), philanthropy and family disputes, amongst various other aspects.

Blog Authors Show/Hide

  • Cyril Shroff
  • Abhilash Pillai
  • Abhishek Jain
  • Aditya Karekatte
  • Aditya Mehta
  • Akshara Shukla
  • Alena Jamal
  • Anand Yadav
  • anant mishra
  • Ankoosh Mehta
  • Arinjoy Chaudhury
  • Ashlesha Mittal
  • Aviral Chauhan
  • Ayush Gumdelwar
  • Ayush Lahoti
  • Bharat Vasani
  • CAM Private Client Team
  • Chirag Shah
  • Deevanshu Jaswani
  • Dhawal Nirash
  • Digvijay Singh
  • Divya Laxman
  • Esha Goyal
  • Guest Authors
  • Gurkaran Arora
  • Harsha Sudhindra
  • Harshita Fatesaria
  • Hita Agarwal
  • Hridaykrishna Motwani
  • Jinisha Motwani
  • Kapil Arora
  • Kartik Dhir
  • Ketaki Gor Mehta
  • Khushi Maheshwari
  • Kunal Gopal
  • Kunal Savani
  • LexBlog Success Team
  • Madhumita Paul
  • Maharshi Shah
  • Manasvi Nandu
  • Manisha Kumar
  • Medha Kagali
  • Mehtab Khan
  • Namrata Kolar
  • Nikhil Agarwal
  • Nikhil Aradhe
  • Nilomi Doshi
  • Palak Nagar
  • Poorva Bhatia
  • Pragya Chandak
  • Pranjita Barman
  • Pratyush Khanna
  • Preyanka Prabhakar
  • Pritha Taraphder
  • Priya Gupta
  • Radhika Parthasarathy
  • Radhika Gaggar
  • Rinkel Singh
  • Ritika Rathi
  • Rohit Tiwari
  • Rishabh Shroff
  • Saakshi Tibrewal
  • Sagar Gaba
  • Saloni Shroff
  • Samiksha Pednekar
  • Sanjana Rao
  • Sanya Rizvi
  • Saumya Motwani
  • Shaishavi Kadakia
  • Shivansh Vishwakarma
  • Shravan Belsare
  • Siddhant Sharma
  • Sindhushri Badarinath
  • Smruti Shah
  • S.R. Patnaik
  • Sruthi Murali
  • Shishir Vayttaden
  • Swati Sharma
  • Tanya Singh
  • Vikash Kumar Jha
  • Vikram Bidvai
  • Vishal Ladhani
  • Vivaik Sharma
  • Yash J. Ashar

Firm Blogs

  • Competition Law
  • India Corporate Law
  • India Tax Law

Stay Connected

RSS LinkedIn Facebook Instagram Spotify

Topics

Archives

Recent Updates

  • Between scrutiny and support: Navigating recent FCRA amendments
  • Allocation of CSR Funds: Need for more equitable distribution
  • Revoking Gifts by Senior Citizens: Supreme Court judgment ‘Beneficial’ but questions remain
  • The importance of brand strategy and management for large family businesses
  • GIFT-IFSC and LRS- Insurance Products for Resident Indians?
Cyril Amarchand Mangaldas logo
  • home
  • about us
  • expertise
  • people
  • contact
  • disclaimer
  • privacy policy

Follow Us

RSS LinkedIn Facebook Instagram Spotify
Copyright ©2025, Cyril Amarchand Mangaldas. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo