A sudden surge in amounts of money Indians are sending their relatives for “maintenance” took place in July 2015, as the amount crossed $124 million, and money remitted to students studying in foreign colleges and universities also rose in July to $113.9 million.
Tax experts believe the surge could be an attempt to escape the American tax authorities.
Since the US government passed the Foreign Account Tax Compliance Act to unearth black money of US residents outside the country, many Indians have been trying to find ways to overcome the tax hurdle.
One senior chartered accountant said ‘since maintenance of relatives cannot be categorised as an asset, one does not need to show transfers for the purpose in their tax returns. Still, the inexplicable surge is difficult to explain’.