Please help me out guys....

Z

zulu400

Registered Users (C)
I apologise for asking a irrelevant question but I need to get this sorted out soon.

My relative was in the US for 3 months on business visa. His company owes him around $18000 for his services. He is saying that to avoid tax in India, he want his company to issue a check in my NRE account in India. And then I can transfer the realized money from my NRE account as a gift to him (as gifts from relative do not attract any tax)

I don't think this is legal, but can you guys shed some light on the matter please ?
Thanks for your help in advance.
 
You are a idiot.

You are asking Money Laundering advise on immigration forum full of frustrated people due to retrogession. You are lucky you are not asking this in person. I can bet atleast 3-4 would have pounced on you!!!!.
 
zulu400 said:
I apologise for asking a irrelevant question but I need to get this sorted out soon.

My relative was in the US for 3 months on business visa. His company owes him around $18000 for his services. He is saying that to avoid tax in India, he want his company to issue a check in my NRE account in India. And then I can transfer the realized money from my NRE account as a gift to him (as gifts from relative do not attract any tax)

I don't think this is legal, but can you guys shed some light on the matter please ?
Thanks for your help in advance.
Click to expand...

This is Perfectly Legal. or let him get Cash, you issue $ check to him, he can encash it in India. No tax for $$ gift.
 
Al Hindi is a terrorist

AlHindi said:
You are asking Money Laundering advise on immigration forum full of frustrated people due to retrogession. You are lucky you are not asking this in person. I can bet atleast 3-4 would have pounced on you!!!!.
Click to expand...

Al Hindi must behave. Or get out of forum.
If you are frustrated thers is place for you in the hell , go there and rest there. Do not come to forum, where only information can be exchanged.

keeping arabic title "Al", he think like a real terrorist.
 
What do you mean by Al=terrorist

Excuse me Mr. 'Great Guru'

Please do not indict a nation and call them terrorists because they are Arabs. How dare you call someone a terrorist because of their Arabic name? Who are you to judge? You need to refrain from condoning a nation because of his/her origin. I am really surprised to hear it from a desi guy.. of all the people. Have some respect for others please. If it wasn't for the United Arab Emirates, most Indians won't be able to send home the money they need. So, please do not call any one a terrorist because he has the word 'AL' in front of his name. Arrogance and ignorance will eventually extinct human race.
 
If the company pays $18k to you, would'nt they send you a 1099 for that which will make you pay tax?
May be it will help your relative from tax evasion not you or your company.
Check with CPA.
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zulu400 said:
I apologise for asking a irrelevant question but I need to get this sorted out soon.

My relative was in the US for 3 months on business visa. His company owes him around $18000 for his services. He is saying that to avoid tax in India, he want his company to issue a check in my NRE account in India. And then I can transfer the realized money from my NRE account as a gift to him (as gifts from relative do not attract any tax)

I don't think this is legal, but can you guys shed some light on the matter please ?
Thanks for your help in advance.
Click to expand...
 
zulu400 said:
I apologise for asking a irrelevant question but I need to get this sorted out soon.

My relative was in the US for 3 months on business visa. His company owes him around $18000 for his services. He is saying that to avoid tax in India, he want his company to issue a check in my NRE account in India. And then I can transfer the realized money from my NRE account as a gift to him (as gifts from relative do not attract any tax)

I don't think this is legal, but can you guys shed some light on the matter please ?
Thanks for your help in advance.
Click to expand...

Gifting money is perfectly legal except to a person who may be involved in terrorist activities. However I strongly believe it is NOT legal to get compensated in the US when one visits on a Business/Tourist visa. Are you sure you want to get involved in abetting an activity that is illegal?
 
1. Perfectly legal for someone to come here(on business visa)and get paid for services rendered.
2. US company will most likely show amount paid to overseas business consultant so no need for deduction of tax at source
3. Your relative is not a US resident thus no tax obligations here in US
4. Perfectly legal to gift $$$ to someone in India (it is sort of money laundering but no one is objecting!)
5. All transections USD 10,000 and above raise automatic red flag after 9/11
6. Sofisticated banking in India and US makes it impossible/extremely difficult to cover money trail

Hope this helps! Let us know what you did.
 
aquagemini said:
1. Perfectly legal for someone to come here(on business visa)and get paid for services rendered.
2. US company will most likely show amount paid to overseas business consultant so no need for deduction of tax at source
3. Your relative is not a US resident thus no tax obligations here in US
4. Perfectly legal to gift $$$ to someone in India (it is sort of money laundering but no one is objecting!)
5. All transections USD 10,000 and above raise automatic red flag after 9/11
6. Sofisticated banking in India and US makes it impossible/extremely difficult to cover money trail

Hope this helps! Let us know what you did.
Click to expand...

Better check with with point no. 3. AFAIK even if the relative is not a US resident, as long as they receive any money in the US, be it income of any kind incl. investment (e.g. dividend, interest etc.), it has to be reported to the IRS. It may be possible to file a return as a non-resident and it may also be possible that no taxes may be owed due to the amount in question but a tax return is a must. A simple 1040 NR-EZ might work.

Also, when the US company pays him any money, they will or atleast ought to have asked for an SSN or atleast an ITIN.

Better safe than sorry. Hope this helps.
 
Thanks for your replies guys. Here is what I found out after consulting an accountant.

1. NRE deposits are non-taxable in India (although any interest or income using the deposit is taxable)
2. The above point is true only because your deposits are either gifts from certain blood relatives OR they are post-tax income, eg checks transferred from overseas.
3. NRE to NRE transfer attracts gift tax, unless its from a blood relative.


So.... if you deposit $xxxx in your account in India from an external source, technically you need to declare that as income while filing US tax return, as being an NRI you are not filing any return in India. Now this is the pure vanilla version of law applicable to the situation, but hey I won't be surprised if someone comes up with a hole in the system, after all this is how the legal profession will survive.

One can still take the risk by not declaring the NRE account here, but you expose yourself to risk in case of an audit, and post 9/11 anything is possible.
 
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