Of late, remittances to India have increased manifold. The weakening rupee, the growing export market and larger number of Indians settling abroad are just some of the factors which have contributed to that phenomenon.
However, despite a rise in remittances, there are some pertinent questions which many individuals have when it comes to sending money to India . Here are some of the most common questions answered regarding money transfer to India
Can I remit to India from an international account I have even if I am living in India?
Yes, doing so is perfectly legal, as long as you pay your taxes on the profit that you make. For example, let’s say you purchase Rs 100 worth of shares in the New York Stock Exchange and make a Rs 100 profit. No, for remitting Rs 200 to India, bank would charge a nominal service fee. Let’s say that fee is Rs 10. Thus, your net profit is Rs 90 (profit- service fee). You are liable to pay tax on that net profit.
What is the best way of money transfer to India?
There is no direct answer to that. Different options have different advantages and disadvantages to them. For example, individual organizations are faster than banks, but they also charge a higher service fee for the same. Similarly, cheque transfer has the advantage that the beneficiary does not need to visit the bank branch. On the other hand, a wire transfer to India Wire Transfer to India is much faster compared to a cheque transfer. Wire transfer to India can typically happen in 24-48 hours while cheque transfer may take 5-7 working days.
What about cases where exporters have their clients transfer money to India?
Exporters can receive money from international clients in any of the legitimate ways such as bank transfer, wire transfer etc. It is the duty of the authorized dealer such as a bank to covert that foreign currency into Indian currency. Exporters can also receive payments directly from their international clients in foreign currency, provided that they surrender the same to an authorized dealer within seven days of the receipt of the amount. If the amount is less than USD 2,000, the beneficiary can keep the same as it is under FEMA rules.
I am remitting a large sum of money? What are the legalities involved?
In case you are remitting an amount in excess of INR 1,00,000 in foreign currency, it is the duty of the authorized dealer such as bank or an authorized institution to verify the purpose of the money. The concerned organization is authorized to collect relevant information from the sender as well as the beneficiary in order to ensure that the money is not for illegal purposes.