India is one of the biggest nations which has people living abroad. According to some government statistics, there are more than three crores Indian live in abroad (NRI’s or living in foreign country as on employee visa). People, who move abroad newly from India often feel trouble while doing money transfer to India to their family. They face some issues in this process like,
- What will be the exchange or transfer fee?
- Which is the ideal and known service provide in the area?
- How is the customer support of that service provider in case of any emergency?
- And most importantly, the time take in process of money transfer.
There are many ways to send money from abroad to India, but which one is reliable, and which method is easier in time. In this article we will discuss the tax levied on sending and receiving money in India along with many such issues.
How to Transfer Money to Your Family from Abroad?
If any person is living or working somewhere in abroad than he can send money to his family or parents through several ways which are hassle free and quick mediums.
Through online banking a person can easily send money to his parents in India to their account. The essentials for this medium are following,
Access Point is- Online or Mobile app that means, he can transfer money from the laptop and phones anywhere by using the sources debit/credit cards or direct bank account transfer. The average time taken for online banking transfer is 1 to 2 working days.
The top operators under the segment are-
- Citi bank- Citi bank transfer money on the very same day and there are no fees in case of transfers for own or partner bank account.
- Kotak Click2Remit- the transfer cost is 1.1 or 2 $ (dollars) per 200$.
- Money2India (ICICI Bank)- the transaction cost is 6.56 $ per 200 $
- Money Transfer Operators (MTOS)
Money Transfer Operators Financial companies carry out the international transfer of funds using their own internal system or other international banking networks. The Access Point for this method is through online & mobile app only by using the source debit/credit cards or direct bank account transfer. The average time taken through this process of Money Transfer Operators is 1 to 2 working days.
The top operators under the MTO method are-
- TransferWise- this service company charge transaction cost 4.77 $ per 200 $
- MoneyGram- it charges transaction cost 6.72 $ per 200 $
A person can transfer the money from abroad to India through private agents. The access point for this method to transfer the money is Banks & money transfer operators. In short, the person can contact to some private agent or financial company to transfer the money to avoid his hassle and consume time and pay him the amount in cash or by credit/debit card along with the transaction cost, however the agent will transfer the money through Online banking and Money transfer operator method only.
Top operators under this method are-
- Western Union- this financial company transfer money within an hour and it charge transaction cost 10.28 $ per 200 $
- Ria- Ria money transfer also completes the money transaction within an hour most of the time and it charge transaction cost 3.68 $ per 200$
Society for worldwide Inter-bank financial telecommunication (offline money transfer facility can be availed at bank branches overseas). To use this method sender should visit the bank branch and money can be transfer by only bank accounts. Under this method the transfer of money can be done in 1-2 working days (or depend on bank working days conditions).
The top operators under the segment are-
- ICICI Bank- this bank charge minimum Rs.1500/- for swift transfer.
- HDFC Bank- this bank charge flat Rs.1000/- for transfers above 500$ or equivalent transfers.
- Foreign Currency Demand Drafts
A form of demand draft made in foreign currency at various bank branches located overseas to remit money to India. The equivalent amount INR will be debited for remittance. The access point of this method is banks only that means sender need to visit the branch to send money through foreign currency demand draft. This process takes 2 to 3 weeks to transfer the money.
The top operators under this method are-
- ICICI Bank- it charges Rs.250/- with additional charge of taxes.
- Axis Bank- its charges Rs.200/- with tax.
Note- (These all operators in every method will be generated by RBI in India)
Tax regulations for transferring money to family in India
According to a report more than three crore Indians live in India and these people transfer more than 80 million US dollars every year in India. This is extremely important to government to keep a note of it specially to check all transfers of money whether it is legitimate or not.
Hence, government keeps the strong tab on every penny which comes inside the country & goes outside the country. Like, if someone transferring amount to his own bank account in India or to his family’s account then it is perfectly regulated in India.
- If someone transferring money (any sum of money) to his family or relative to India from abroad then, he doesn’t need to pay any kind of tax on that money. He must inform only the income tax return officials at his country wherever he is living and also at the recipient’s country.
- Who is Family? According to the Income Tax Act, 1961 the family word includes any of blood relative (mother, father, children, brother, sister, in-laws) or any financial dependent person.
- If someone is transferring money to a friend or someone who is not a blood relative, hence in such case the amount will be taxed.
Conclusion
Sending money from abroad to your loved ones in India is not a big deal in today's modern world, and there are many such platforms where people can send money from their phone or laptop on their own without any hassle in few minutes. But to do this type of transnational transaction, it is advisable to send money through authenticated means to avoid any kind of risk. On the other hand, the concern is regarding the transactional charges where people want to avoid high-cost charges for sending a very minimal amount therefore, there are verified platforms which provide services with least charges.
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