Home |Tax returns filing | I am an NRI. I had sent INR 66 lakh to my sister 3 years ago. How can she repay me so that I don’t have to pay a tax on the amount received?

I am an NRI. I had sent INR 66 lakh to my sister 3 years ago. How can she repay me so that I don’t have to pay a tax on the amount received?

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Prabhakar Prabhakar
Answered on February 07,2020

It appears that your sister is based out of India and is returning a loan she took from you. This payback is not a gift for the purpose of income tax. She may or may not be paying interest to you, depending upon what has been agreed upon. Receipt of just the loan amount extended without interest would not give rise to any income in your hands in India. However, if she repays it with interest, you will have to offer the interest income to tax in India under the head “income from other sources". Since you are a resident of another country, you do consider local tax implications on such receipt, with or without interest.

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