How to Send Money Abroad From India

Sending money abroad from India requires understanding financial guidelines and available services. It involves understanding the regulatory framework, selecting a service provider, and preparing documentation. This article guides you through the requirements and options for a smooth, compliant international money transfer. It outlines steps from understanding permitted reasons and amounts to initiating and tracking your transfer.

Permitted Reasons and Amounts for Sending Money Abroad

Individuals residing in India can send money abroad through the Liberalised Remittance Scheme (LRS), governed by the Foreign Exchange Management Act (FEMA) of 1999. This scheme allows resident individuals, including minors, to freely remit up to USD 250,000 per financial year, which runs from April to March. If a minor is involved, a parent or legal guardian must facilitate the transaction on their behalf. This annual limit applies cumulatively across all remittances.

The LRS permits remittances for various current and capital account transactions. Common permissible purposes include education abroad, medical treatment overseas, and maintenance of close relatives. Funds can also be sent for personal travel, gifts, donations, and certain overseas investments like acquiring shares, bonds, or mutual funds. Each remittance requires a declaration of purpose, which must align with these categories.

However, certain transactions are prohibited under FEMA and the LRS. These include remittances for purchasing lottery tickets, engaging in margin trading, or acquiring real estate abroad. Remitting income from activities like racing or riding, or for purchasing banned magazines, is also not allowed.

A Tax Collected at Source (TCS) may apply to remittances exceeding certain thresholds. For most purposes, no TCS is levied on amounts up to ₹10 lakh in a financial year. If the remitted amount surpasses this ₹10 lakh limit, a 5% TCS applies to the amount exceeding the threshold. An exception exists for educational remittances funded by a loan from a recognized financial institution, where no TCS is collected.

Choosing a Money Transfer Service

Selecting the right money transfer service is an important step, as various providers offer different features concerning speed, cost, and convenience. Traditional banks offer wire transfers, utilizing the SWIFT network for secure and widely recognized transactions. While banks are reliable and have global reach, their processes can be slower, taking several business days, and their fees or exchange rates may be less competitive compared to specialized services.

Authorized Money Transfer Operators (MTOs) like Western Union or MoneyGram provide physical networks with agents in many locations, offering options for cash pickup in addition to bank deposits. These services are known for their speed, particularly for urgent cash needs. MTOs are regulated by the Reserve Bank of India (RBI) and are known for their accessibility.

Online money transfer platforms, such as Wise or Remitly, offer a digital-first approach. These platforms provide more competitive exchange rates and lower transfer fees, alongside a user-friendly online experience. Transfers through online platforms can be faster, sometimes completing within hours or a couple of business days, depending on the destination and payment method.

When evaluating services, comparing exchange rates is important, as even small differences can impact the final received amount. Look for transparency in fees, differentiating between fixed charges and percentage-based fees. The speed of transfer is another factor, especially if the recipient requires funds urgently, with delivery times ranging from near-instant to several days. Ensure the chosen service is authorized by the RBI and has a reputation for security and customer support. Finally, consider the recipient’s options for receiving money, whether through a direct bank deposit, cash pickup, or mobile wallet.

Information and Documentation for Transfers

Before initiating any international money transfer, gathering all necessary information and documentation is necessary. For the sender, this includes providing your full legal name, current address, and contact details. You will also need your Permanent Account Number (PAN) card details, as it is mandatory for all outward remittances from India. The bank account for the transfer must also be identified.

Details about the recipient must be accurate to ensure the transfer reaches the correct person and account. This includes the recipient’s full legal name, their complete address, and the name of their bank. For international bank transfers, the recipient’s bank account number and the SWIFT/BIC (Society for Worldwide Interbank Financial Telecommunication/Bank Identifier Code) are essential for routing funds. A phone number or email address may also be required by the service provider.

Indian regulations mandate Know Your Customer (KYC) documentation from the sender to verify identity and address. This involves submitting a valid photo ID, such as an Aadhaar card or passport, along with proof of address like a recent utility bill.

The declaration of purpose for the remittance is a key part of documentation. This declaration, often submitted via Form A2, confirms funds are for a permissible reason under the Liberalised Remittance Scheme. Depending on the purpose, additional supporting documents may be required. For instance, sending money for education might necessitate a university admission letter or fee invoice, while medical treatment might require hospital bills or a doctor’s letter.

Initiating and Tracking Your Transfer

Once you have determined the permitted reasons and amounts, selected a money transfer service, and gathered all required information, you can initiate your transfer. The submission method depends on your chosen service provider. For online platforms, the process involves logging into your account, entering the transfer amount, and inputting sender and recipient details. You will also select the purpose of the remittance, review the exchange rate and applicable fees, and then confirm the transaction.

If you opt for a traditional bank branch or a Money Transfer Operator agent, you will visit their physical location. There, you will submit the completed forms, supporting documents, and your KYC proofs. The payment for the transfer can be made through various methods, including a direct debit from your bank account, a National Electronic Funds Transfer (NEFT), a Real-Time Gross Settlement (RTGS), or a debit card.

Immediately after submitting your transfer request, you should receive a confirmation receipt. This receipt will include a unique transaction reference number (UTR) for tracking your funds and an estimated delivery time. You can use this UTR to monitor the status of your transfer through the service provider’s website or mobile application.

Should any delays or issues arise during the transfer process, the UTR becomes useful for resolving issues. You can contact the customer support team of your chosen service provider, providing them with the UTR to quickly identify and address the problem.