If you have a family member or a relative staying abroad and sending money there is one of your dos in your financial tasks then you ought to be aware of some of the key rules that influence this.
For the uninformed, there is no ceiling on the number of times you can send remit the money overseas. But there is a cap of the amount i.e., $2.5 lakh which a resident can send in one year via multiple transactions under the liberalised remittance Scheme.
However, NRIs who hold an NRO account can send up to $10 lakh in a financial year, whereas the account holders with NRE and FCNR accounts have no such limits.
Since 1 October 2020, tax cleared at source (TCS) has been applicable on outward foreign remittance.
Documents that need to be accompanied
For sending money abroad, it is imperative to attach the necessary documents. You will have to submit the Permanent Account Number (PAN), identity and address proofs, and LRS declaration form.
Also, it depends on the purpose of remittance. For some remittances, one might have to give specific documents, such as visa, passport, ticket, or as specified by the bank or transferring agency.
Aside from this, if you happen to remint money to a non-resident individual or a foreign company, then you will also have to submit Form 15CA.
It is vital to note that there could be some taxes involved while sending money abroad. If someone is remitting over ₹7 lakh, 5 percent TCS (tax collected at source) will apply. And if the remittance is funded via student loan, then the rate is 0.5 percent.
And if you are unable to provide PAN details, then TCS is 10 percent for more than ₹7 lakh remittance and 5 percent for the remittance funded by foreign education.
Faster alternatives
One way to send money abroad is via the regular bank account; that is not the fastest mode, however. The cheaper and also the swifter alternative to remit money is via digital means such as Western Unions of the world. As a matter of fact, these companies also route the money via a network of banks they have tied up with. You can use their sites or apps to complete the process digitally.
Some of these digital options include Wise, Western Union, BookMyForex, ExTravelMoney, among others.
