How To Send Money Abroad From India
With people moving abroad to study and settling, there is an increase in remitting money internationally. The past few years have seen many students moving abroad for higher education to the U.S., the UK, Canada, Australia, etc. With higher education comes fees and daily expenses that need to be paid. Sending money abroad is actively taken up by parents of immigrants as well. With multiple money transfer methods being easily available, it has now become easy to send money.
Essentially, to send money abroad requires currency conversion and the exchange rate keeps changing constantly with the market. As per Foreign Exchange Management Act (FEMA) citizens of India in a financial year can transfer up to $2.5 lakh and the highest amount of remittances is governed by the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS).
In the latest Budget of 2023-24, India’s Finance Minister Nirmala Sitharaman announced that the TCS i.e. tax collection at source for abroad remittances would increase from 5% to 20% on your transaction amount. This falls under LRS and will be effective from July 1, 2023.
Ways To Send Money Abroad From India
Currently, there are many ways in which you can send money abroad, below are the methods you can choose to transfer money internationally:
Online Money Transfer Service
If you wish to transfer funds immediately without any paperwork online money transfer services are best for you. It’s a web-based process and can be easily done sitting on your couch. No matter where you are and in what corner of the world you want to send money it will only take up to 24 hours to complete the transaction.
The online money transfer service is also trackable and different services have different exchange rates so do your research before you choose an online service provider. The only thing required is to upload documents and ID proofs to get started. Other than the documents you need to also submit information like beneficiary account details and SWIFT code. Online services provide competitive exchange rates and have no hidden charges applicable to them.
Demand Draft (DD)
Demand Draft is a way that requires you to make prepaid payments while sending money abroad. It is issued in the currency of the country where you are planning to send the money. Banks that issue the DD charge a nominal fee. The problem that occurs with the demand draft is that once it is issued it is difficult to revoke it.
If you wish to cancel the transaction you have to visit your bank’s outlet and the currency demand draft can be encashed without your signature. It is the safest method of sending money abroad but it takes a long time to reach the recipient’s account.
International Money Order
International money transfer order is in existence way before the launch of electronic wire transfers. This method is generally used by people who are not very well aware of the new technology. It is issued either by the banks or postal services. The currency is converted into the currency of the desired country. Once the beneficiary gets the money order, it can be easily encashed at any post office or cooperating bank.
Wire Transfer
Wire transfers via banks are the most affordable, easy and convenient way to send money abroad. The fast delivery and low service charges compared to any other way of transferring gained electronic wire transfer popularity. This is facilitated through the SWIFT networks, a messaging protocol that allows fund transfer worldwide. It takes about 24 to 48 hours to complete the transfer and the funds to reach the recipient account. It is a secure way of transferring but you may not get the desired exchange rate.
Steps To Follows To Send Money Abroad From India
Here are a few steps that you need to follow while transferring money through wire transfers. You can use Western Union or BookMyForex to transfer money. Below are the steps if you choose BookMyForex:
Step 1: Firstly, you need to verify whether you are eligible for international transfer. Now, give the details of the sender and the receiver and mention the purpose of your transfer.
Step 2: Once you list the information you will be required to send a few necessary documents. The documents that are required are your permanent account number (PAN) card, remitter address proof and passport front and back page, among others. (The documents can be easily uploaded too on their website)
Step 3: Transfer funds to one of the partner banks of BookMyForex.
Step 4: Now, you will be booked for the exchange rate that you will be able to see on your screen. Eventually, a digital A2 will be given to you. You can sign it on the BookMyForex portal itself without the trouble of visiting the bank.
Step 5: The transfer procedure will begin with the partner bank and you will receive a SWIFT acknowledgment.
Reasons To Send Money Abroad From India
Here are a few reasons to send money abroad:
- Overseas tuition fees
- Buying overseas property
- Sending funds to friends and family
- Overseas accommodation
- Overseas travel
- Purchasing goods from abroad
Frequently Asked Questions (FAQs)
What is a SWIFT code?
A SWIFT code is a unique code that has eight to eleven numbers. The code recognizes the recipient’s bank account details:
- Name
- Address
- Country
- Branch Code
It also alerts the banks abroad about incoming payments.
What are the factors I should consider when choosing a money transfer method?
You should consider the factors like exchange rate, overhead charges and transfer speed before choosing a money transfer method.
What is the current exchange rate from Canadian Dollars (CAD) to Indian Rupees (INR)?
The current exchange rate from CAD to INR is 61.30 as of May 26, 2023.
