Payment made to builder through my friend's bank account

Hi Pankaj, Hope you are doing fine.

I am a software professional, working on a WP visa in Australia for last 1.5 yrs. Last year, I bought a under construction flat in India. I made all payments to builder through my friend's bank account (by cheque). That time I didn’t have any NRE/NRO account so I transferred money to my resident account then transferred to my friend's account. Also sometimes I transferred money directly to my friend's account through ICICI money to India.

I wish to know that: 1) Are these transactions fine in RBI perspective? 2) Do I have to do pay any tax on these transactions?

Your help is much appreciated, Thanks a lot.

asked Aug 25 '11 at 07:22 by akki 1111

It may have some serious issues. Queries may be raised by RBI under foreign regulations to provide reasons for the same.

Transferring amount to a non-relative may even attract gift tax.

There won't be any tax payable on your part for this transaction, but your friend may be under scrutiny to receive high value transfers from abroad.

I am not sure how builder accepted payment from a third person for property in your name.

answered Aug 25 '11 at 17:06 by Pankaj Batra 5.2k320

Many thanks Pankaj for your quick reply... The amount I transferred was there in my friend's account only for a few days. Then cheques were cleared. What can I/my friend do now in this situation to avoid any tax/penalty or scrutiny. Do I have to prepare any kind of undertaking/documentation?? Thanks again..
(Aug 26 '11 at 05:25) akki
I would advise you to consult an experienced CA/Tax professional who is expert in foreign remittances too.
(Aug 26 '11 at 15:00) Pankaj Batra

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Asked: Aug 25 '11 at 07:22

Seen: 2,272 times

Last updated: Aug 26 '11 at 15:00