How to Send money from India

to a foreign country legally . . .

•

How much money are Indian

residents allowed to send

abroad . . .

Sending money from India by a Indian resident or an NRI to someone in another country* falls under the rules of the Foreign Exchange Management Act (FERA). Indian residents and NRIs can send money abroad for any FERA approved purpose such as for example: maintenance costs for a relative, education, gifts, donations, medical treatments etc. * Except some specific countries specified by the government, such as Nepal & Bhutan.

How to send money abroad from

India

Transactions of sending money abroad are done at various banks in India, normally the bank where the sender has their account. This is due to Know your customer (KYC) rules set by the RBI. The bank where a person has their account in already has such information regarding the customer. If someone goes to another bank to remit money abroad, they will require identity information to comply with the KYC rules. Money being sent abroad can be sent either by a wire transfer or a foreign currency demand draft. Wire transfer is the faster and secure method of sending funds from India to other countries. Funds can be sent out of India in the following currencies: • US Dollars • Euro • British Sterling Pound • Singapore Dollars • Canadian Dollars • Australian Dollars • Swiss Franc • Hong Kong Dollar Procedure to send money abroad from India 1. Contact bank where you maintain your bank accounts. o This should not be a bank where you have recently opened a bank account but a bank account that has been operated for at least one year. In the event the bank account is less than a year old, your previous bank account statements or copies of income tax return documents may be required by the bank you deal with. 2. One of the documents the bank will require is called ‘Application cum declaration form A2’ (Click HERE to view sample form) your bank can probably provide you with the form and offer help in completing the form. 3. The purpose of remittance of funds is accepted by banks normally by your self- declaration. 4. Money can be sent by wire transfer or bank draft. Kindly note: There is a restriction on remittance to some countries like Bhutan, Nepal, Mauritius, Pakistan and certain other countries that are enlisted by the Government from time to time

Purpose for which Resident Indian

Citizens can send money abroad

There was a time in the past when foreign exchange rules were quite strict and getting foreign exchange through the black market was common. Now the rules concerning foreign exchange transactions have been relaxed and Indian residents can easily get foreign exchange through legal channels. For private visits to any country except Nepal & Bhutan, Indian residents can get up to US$ 10,000 per calendar year. A self declaration of the exchange requirement and Form A2 is required by your bank. For Business travel, US$ 25,000 is available For going abroad for medical check up or treatment, US$ 100,000 is allowed without providing any estimates from hospital or doctors. Documents required are a request letter for the foreign exchange, a copy of your passport and an undertaking to submit expenditure details and Form A 2 Indian students going abroad for study can get foreign exchange of up to US$ 100,000 per academic year or more if they have an estimate from the institution they are going to attend. Documents required are a self declaration, admission proof, passport copy and Form A 2. Indian citizens can send donations in foreign exchange of up to US$ 5000 per annum. Only a self declaration giving details of the recipient and form A 2 is required. Indian residents can also send gift remittances of US$ 5000 per annum. US$ 100,000 for maintenance of close relatives per year. Remittance for Miscellaneous Purposes up to US $25000. Only application form is required. All resident individuals including minors are eligible to avail the Liberalised Remittance scheme facility which allows them to send up to US$ 250,000 per financial year. More information on Liberalised Remittance Scheme (LRS) is provided below.

What is the Liberalised Remittances

Scheme?

The Liberalised Remittance Scheme was announced in 2004 by the government in an effort to make it easier for Indian residents to conduct foreign exchange transactions. Initially the amount limit under this scheme was set at $25,000 and went up at one point to US$ 200,000. It is currently set at US$ 250,000 Under the *Liberalised Remittance Scheme, the government allows any resident individual, including minors to send up to US$ 250,000 per financial year abroad for any permitted capital / current account transactions. Examples of such transactions can be: Buying property abroad Investing in shares, securities, bonds, mutual funds abroad Opening and maintaining foreign currency accounts with banks outside India for carrying out the above mentioned transactions Gifts and donations abroad Under the Liberalised Remittances Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.

Who is eligible to avail the facility

under this scheme?

All resident individuals are eligible to send money through the Liberalised Remittances Scheme. They should have a bank account with an authorized bank and a PAN card. Some banks prefer that the remitter under this scheme should have a bank account with them for at least a year or so. Remember, PAN number is compulsory these days for sending any money abroad from India.

Changes of Limit under LRS Scheme

RBI has periodically announced changes to the amount of money that can be remitted abroad under LRS scheme. In Aug 2013 the LRS limit was reduced to 75,000 from the earlier limit of 200,000. Along with the reduction of the limit, restrictions were also announced whereby LRS could no longer be used for acquisition of immovable property, directly or indirectly, outside India. On June 2014 increased to 125,000 Restrictions removed except for prohibited foreign exchange transactions such as margin trading, lotteries. In 2015 increased to 250,000 where it currently stands