How to Send Money From India to Canada

Sending money from India to Canada is a common financial activity, often driven by family support, educational expenses, or business transactions. This process involves navigating various methods, understanding associated costs, and adhering to regulatory frameworks in both countries. This guide aims to provide essential information for individuals looking to remit money from India to Canada.

Available Money Transfer Methods

Several methods exist for sending money from India to Canada, each with distinct characteristics regarding speed, cost, and accessibility. Traditional banking channels, such as wire transfers, are a common choice for their security and reliability, though they can sometimes involve longer processing times, typically 1-5 business days. Banks like SBI, ICICI, HDFC, and Axis Bank facilitate these outward remittances, allowing direct transfers to Canadian bank accounts.

Specialized money transfer services, including Western Union and MoneyGram, offer alternatives with varying options for sending and receiving funds, such as cash pickup or direct bank deposits. Online remittance platforms, such as Wise, Remitly, and Xoom, have gained popularity due to their competitive exchange rates, lower fees, and often quicker transfer speeds, with some claiming transfers can arrive in seconds or within 24 hours. These digital solutions integrate with bank accounts, mobile wallets, and debit/credit cards, making them convenient for personal and small to mid-sized payments.

Key Information and Documentation Required

For the sender in India, this includes their full legal name, address, and contact details. A valid Indian identification document, such as a PAN card, Aadhaar card, or passport, is required for Know Your Customer (KYC) verification. Proof of the source of funds, which might include bank statements, salary slips, or tax returns, may also be requested to ensure compliance with regulations.

Detailed information about the recipient in Canada is also necessary. This encompasses their full legal name, address, contact details, and Canadian bank account information. The required bank details include the bank name, branch address, SWIFT/BIC code, account number, institution number, and transit number. The purpose of the remittance must be stated, with common reasons being family maintenance, education fees, medical expenses, or as a gift. Indian financial institutions often require the completion of specific forms, such as Form A2, for Liberalized Remittance Scheme (LRS) declarations.

Understanding Transaction Costs and Exchange Rates

Exchange rates directly impact the final amount the recipient receives. A distinction often exists between the mid-market rate (the rate seen on financial news or search engines) and the retail rate offered by providers. Many services apply a markup to the exchange rate, which acts as a fee. This markup can range from 1.5% to 7.5% of the transaction value.

Beyond exchange rate markups, several types of fees can apply. Transfer fees are charged by the sending service or bank, which can be flat fees or a percentage of the transferred amount. For traditional wire transfers, intermediary banks involved in processing the transaction may levy their own charges, known as correspondent or intermediary bank fees, ranging from $15 to $30 per bank. The recipient’s Canadian bank might also impose fees for receiving an international transfer.

Navigating Regulatory Requirements and Limits

International money transfers from India are subject to a regulatory framework designed to ensure compliance and prevent illicit financial activities. Indian residents are governed by the Liberalized Remittance Scheme (LRS) under the Foreign Exchange Management Act (FEMA), which permits them to remit up to USD 250,000 per financial year (April to March) for various approved purposes. This annual limit applies to individuals, including minors, and covers both current and capital account transactions. Remittances exceeding certain thresholds, such as INR 10 lakh, may also be subject to Tax Collected at Source (TCS), with rates varying depending on the purpose of the transfer.

In Canada, regulations primarily focus on reporting large incoming transfers to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Financial entities and money services businesses must report international electronic funds transfers of CAD 10,000 or more in a single transaction. This reporting requirement also applies to multiple transactions totaling CAD 10,000 or more within a 24-hour period if conducted by or on behalf of the same person or entity.

Step-by-Step Transfer Process

If using a traditional bank, the sender visits a branch to submit forms and make the payment. For online remittance platforms, the process begins by logging into the service’s website or mobile application.

After logging in, the sender selects the recipient (whose details should have been previously entered), specifies the amount to be sent, and confirms transaction details, including the purpose of the transfer. Payment is then made through the chosen method, such as a bank transfer, debit card, or credit card. Upon successful submission, a transaction reference number, sometimes referred to as a Unique Transaction Reference (UTR) or tracking ID, is provided. Senders can track the status of their transfer online or through customer support. Funds are expected to be received by the Canadian recipient within 1 to 5 business days, though some online services may offer faster processing times.