Sending money abroad Sending money abroad? Know these things – sending money abroad? know these things

Usually we all send money from abroad to our country. But in some cases we need to send money to people abroad. We have to send money to foreign countries for many things like education expenses of our children or medical expenses of our relatives. RBI has now relaxed the remittance scheme for sending money abroad. The procedures are simplified under the Foreign Exchange Management Act, 1999. Here are some doubts that arise when you send money abroad.

How much money can be sent?

A resident can remit up to $2.5 lakh in a financial year to the account of the person abroad. This amount can be sent in multiple installments to the current account and capital accounts. 2.5 lakh dollars can be transferred to both the accounts or just one. There are no limits on sending money abroad.

NRIs with NRO accounts can pay up to $1 million in a financial year, while those with NRE and FCNR accounts have no limits.

Reason for sending money?

You can send money for visiting abroad (except Nepal, Bhutan). Money can be sent as a gift or donation. Money can be sent abroad for any current account transactions like employment, emigration, attending conferences, maintenance of close relatives, medical expenses, study abroad etc.

Are there taxes on foreign remittances?

If remittances abroad are for NRIs, we will have to pay a small amount of tax in our country. From October 1, 2020, remittances abroad will be taxed. Five percent TCS will be applicable if you send more than Rs 7 lakh. If you are repaying a foreign education loan, TCS will charge 0.5 percent on amounts above Rs 7 lakh. If you don’t provide PAN details, the above categories will be taxed at 10 percent and five percent respectively

How much will it cost?

The cost also varies depending on the methods you use to send money. Money transfer companies have different costs for online and offline options. Charges usually include transfer fees, correspondent bank fees, currency spread (exchange rate), courier charges and GST. In case of online transfer the cost includes flat fees of both banks and transfer agent.

Required documents

You need to submit Permanent Account Number (PAN), Identity and Address proof and A2 cum LRS declaration form. Depending on the purpose of the remittance, you may also need to provide specific documents such as a passport, visa, ticket, invoices from a travel agency, or bank or transferring agency. If you are sending money to a non-resident person or a foreign company, you need to submit Form 15CA. This is a document certified by a Chartered Accountant that you have paid taxes.