Q .How much money can be sent?
A resident individual can remit up to $2.5 lakh in a financial year through multiple transactions for any permissible current or capital account transaction, or a combination of both. There are no restrictions on the frequency of sending money abroad. However, NRIs with an NRO account can remit $10 lakh in a financial year, while those with NRE and FCNR accounts have no limits.
Q.For what reasons can you send?
You can send money for private visits abroad (except Nepal, Bhutan); gift or donation; employment; emigration; maintenance of close relatives; travelling for business, attending a conference or specialised training; for medical expenses or check-up, or accompanying a patient for medical treatment/check-up; studies abroad; or any other current account transaction not covered under the definition of current account in FEMA 1999.
will apply. If you are repaying a loan for foreign education, 0.5% TCS will be levied on amounts more than Rs.7 lakh. If you fail to furnish PAN details, you will have to pay 10% and 5% tax, respectively for the above categories. In case of an NRI, a surcharge, and education and health cess will also apply.
Q.How much will it cost?
Depending on whether you pick online or offline options, banks or money transfer companies, the costs will vary. The charges will usually include transfer fees, intermediary or correspondent bank fees, currency spread (exchange rate), courier charges, and GST. For online transfers, both banks and transfer agents have a mix of flat fee and percentage of amount being sent, along with taxes.
Q.Which documents are needed?
You will have to submit the Permanent Account Number (PAN), identity and address proofs, and A2 cum LRS declaration form. Depending on the purpose of remittance, you may also have to provide specific documents, such as passport, visa, ticket, invoices from travel agency, or as specified by the bank or transferring agency. If you are sending money to a non-resident individual or a foreign company, you will also need to submit Form 15CA, and in some cases, Form 15CB, which is a certificate from a chartered accountant verifying the tax paid.
Q.How long will it take?
It can be transferred within 24 hours or take up to 30 days, depending on the option you choose to remit money. Q How can the money be remitted? You can either send money online or offline (demand drafts), both services typically offered by banks and private money transfer/exchange companies.
- Online wire transfer via money transfer or exchange companies
It is the fastest option and cheaper than transfer through banks. These companies also route the money via their network of banks and you can use their sites or apps to complete the process digitally. Some of these include BookMyForex, Wise, Western Union, ExTravelMoney, etc. If you want to send $1,000 to the US, you will typically pay Rs.750-2,500*.
- Online wire transfer via banks
This is a more expensive, though reliable, method of sending money overseas. You can remit through your bank via Net banking or by going to the bank branch and initiating the transfer. For sending $1,000 to the US, you will easily end up paying around Rs.2,000-4,000* .
- Bank demand draft/ cashier’s cheque
Foreign currency demand drafts are delivered physically via courier or mail. Despite low cost and high reliability, it is not the preferred option as it takes a long time. If time is not crucial for you, this could be a good way to transfer funds.
- International money order
An outdated option, India Post and very few banks offer this service.
* Costs are indicative and may vary.