[kumarvishalsah]

Hi,

I have an acquaintance in US (a US citizen) who transfers money to me every 15-20 days (ranging from $800 to $1600). This money is given to me in lieu of consulting services I provide to him during my spare time (on weekends). He transfers the money through remit2india and he has chosen purpose as "Gift". On all the money he sends me, he has already paid taxes there in US. What are my tax implications here in India? What is the maximum cap over which I will be taxed? Is there a dual tax scenario applicable in India (since he already pays taxes to US Federal)?

Thanks

[AtlantaTaxExpert]

It is not a gift.

You are receiving payment for services rendered. That income is subject only to Indian taxes because the work was done in India.

[kumarvishalsah]

Thanks for the reply.

So that means he is not liable to pay taxes in US ? FYI he transfers the money out of his own personal earnings and he chose it as a gift because it not exactly a customer- vendor situation but we have been friends for long and I help him with his work and inturn he pays a part of the money he earns (obviously after paying taxes).

Please help me understand the situation as I would not want both of us to be taxed.

[taxesforaliens]

If your friend is hiring you as a consultant for his business, he would be able to deduct the amount he pays you as business expenses.
That would however not change the fact, that you need to declare that money as income in India and be taxed on it.

[AtlantaTaxExpert]

Yes, there is NO U.S. tax liability, period.