The below content is purely for informational purposes and is not intended to constitute advisory of any kind. Please note, these are in-depth articles which are best viewed on large screen devices like laptops, desktops and tablets. The position reflected in this article has been updated as of January 15, 2024.
Whether you are a Resident Indian (RI) sending money to your family residing abroad, or a Non-Resident Indian (NRI) seeking to repatriate funds earned in India to your country of residence, you must comply with the prevailing Foreign Exchange Management Act (FEMA) regulations and rules made thereunder.
You can make remittances across different countries and banks. The funds are electronically debited from your account and credited to the recipient's account.
For such transfers, typically, you need the recipient's bank account details, including the account number, bank name and branch, name, address and contact information of both sender and receiver, SWIFT code, etc. It is recommended that you check with your bank for detailed information on such transfers.
Transfer money internationally from India as an NRI
You may be looking for convenient modes to send money from India to your overseas country of residence. In order to repatriate money, you can utilise:
Non-Resident External (NRE) account
Non-Resident Ordinary (NRO) account
Foreign Currency Non-Resident Bank (FCNR (B)) account
For NRO accounts, there is no limit on repatriation of current income (i.e., rent, interest, dividends, professional fees, and pension). You can repatriate capitalincome (i.e., proceeds from maturity of Fixed Deposit (FD), sale of property, redemption of mutual funds, shares, etc.) upto a maximum of USD 1 million per Financial Year (April-March) cumulatively from all your NRO accounts held in India.
There is no limit on the amount of funds you can repatriate from your NRE or FCNR (B) accounts.
ICICI Bank customers can remit funds overseas through digital modes such as Retail Internet Banking (RIB) or iMobile Pay App, the bank’s mobile banking platform, besides making requests at any of the ICICI Bank branches in India and select geographies overseas..
Frequently Asked Questions
What does Tax Collected at Source (TCS) on Foreign Outward Remittance mean?
The Finance Act, 2020, amended Section 206C of the Income Tax Act, 1961, and introduced TCS on foreign remittance under LRS subject to the applicable threshold limit. This tax is meant to track and regulate foreign outward remittances and ensure that appropriate taxes are paid on such transactions. The TCS rate may vary depending on the nature of the remittance and the total amount being transferred. It is important for individuals to comply with these regulations when making outward remittances. TCS is applicable at the Permanent Account Number (PAN) level. Any TCS paid can be used to offset your tax liability in India at the time of filing your return.
Please note, TCS is only applicable for residents.
Anil, a resident as per FEMA, sends money regularly to his child studying in the United States. He wants to understand how TCS works on outward remittances.
Under LRS, TCS is exempted up to a limit of ₹7 lakh per Financial Year (April–March) per person through all modes of payment regardless of the purpose of remittance except for overseas tour packages. The TCS collected on foreign outward remittance can be claimed as a credit while filing the income tax return in India. Beyond this threshold, TCS rates will vary depending on the purpose of payment, as tabulated below:
Please note, tables are best viewed on desktops and in landscape mode on mobile phones
Purpose | Rate of TCS* |
|---|---|
Education financed by a loan from financial institution | 0.5% of the aggregate of the amounts more than ₹7 lakh in a Financial Year |
Education not financed by a loan | 5% of the aggregate of the amounts more than ₹7 lakh in a Financial Year |
Medical treatment | 5% of the aggregate of the amounts more than ₹7 lakh in a Financial Year |
Purchase of overseas tour programme package | In a Financial Year 5% of the aggregate of the amounts upto ₹7 lakh and 20% of the aggregate of the amounts in excess of ₹7 lakh |
Any other purpose(other than specified above) | 20% of the aggregate of the amounts more than ₹7 lakh in a Financial Year |
*TCS rates are applicable effective October 1, 2023, basis the Finance Act, 2023.
Please note, TCS is only applicable to residents.
Difference between TCS and Tax Deducted at Source (TDS)?
As per Section 206C, the Income Tax Act, 1961, was amended and introduced TCS on foreign outward remittance by residents (as per FEMA) under LRS are subject to the applicable threshold limit.
TDS refers to the tax amount that is deducted from the income by the payer and is directly deposited to the Income Tax department on the receiver’s behalf. This mechanism ensures that the NRI's tax liability is fulfilled and facilitates an easy adjustment of the tax amount during the filing of their income tax return.
Please note, TCS is only applicable to residents.
Shreya is an NRI with both an NRE and NRO account in India. Is TCS applicable to her when she remits money abroad from her NRI bank accounts in India?
No, NRIs cannot remit money under LRS and hence, are not liable to pay TCS while remitting money from India.
Please note, TCS is only applicable to residents.
Anita, a resident Indian, is paying the education fee for her daughter studying in the United Kingdom (UK). Will she have to pay TCS for the outward remittance?
For payments to a foreign educational institution (not having any kind of presence in India) for a course to be conducted overseas, TCS will be applicable at 5% for amounts greater than ₹7 lakh per Financial Year (April-March).
Please note, TCS is only applicable for residents.
Sakshi, a resident Indian, is sending ₹5 lakh to her niece in Canada, as a 25th birthday gift. She has not made any other remittances under the LRS scheme. Is Sakshi liable to pay TCS or TDS on this outward remittance?
No, Sakshi will not have to pay TCS for the outward remittance as the amount is less than ₹7 lakh.
Please note, TCS is only applicable for residents.
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