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Money transfer tips for NRIs living abroad

Money transfer tips for NRIs living abroad.


While making an NRI money transfer may be convenient, one must stay cautious and alert during the process. This is critical since the claim process for the money transferred due to any step gone wrong may be complicated, as more than one geography and regulator may be involved with specific rules. Here are 4 money transfer tips before you remit money to India.


Money transfer tips for NRIs:


  1. Account details of recipient – One may transfer funds from outside India to India either in his/her name or in the name of someone else. Such persons may be parents, relatives, or even friends. There are no restrictions in terms of transferring funds to any bank account in India through normal banking channels. However, one must take care of providing proper account details while initiating the transfer of funds. The account details may include the name of the Bank, Branch, Account Number, IFSC and SWIFT Code. 
  2. NRI money transfer rules – One must also stay aware of the money transfer rules as may be applicable while transferring funds from one account to another. One may transfer funds from a Non Resident External (NRE)/ Foreign Currency Non Resident (FCNR) Account to a Non Resident Ordinary (NRO) Account. However, one may not be able to transfer funds from NRO to NRE Account, as NRE Accounts can only accept foreign currency credits from outside India. Further, the interest income on NRE/ FCNR Accounts are also tax-exempt. While NRO Accounts allow full repatriation of the interest earned in such account after deducting Tax Deducted at Source (TDS). The principal balance is allowed to be repatriated only up to specified limit i.e. up to USD <1> million per Financial Year (FY). However, in case one needs to transfer funds to his/her NRI bank account for consumption within India, NRO Accounts tend to be more suitable.
  3. Mode of transfer – While transferring funds from outside India, one may also consider the transaction costs associated with such a transfer. This is because any transaction costs effectively reduce the funds received by the recipient. The transaction costs tend to vary with different modes for making international fund transfers. One must select the medium that is cost-effective as well as reliable, while also considering the frequency and quantum of funds. If you regularly send funds, you may consider using the medium charging transaction costs as a percentage of total remittance. On the other hand, infrequent money transfers like investments, etc. may be transferred through the medium, which charges on a 'per transaction' basis. Further, cost should not be the only consideration one makes while selecting a suitable mode of transfer.
  4. Transparent exchange rates – Such money transfers tend to involve more than one currency, since the money gets remitted in a foreign currency and then is generally credited in equivalent Indian currency in an Indian bank account. For example, one may send the funds in US Dollars, which will be converted into equivalent Indian currency at the prevailing exchange rates by the receiving bank and credited to the bank account in rupees. One must select a suitable mode, which transparently discloses the exchange rate while doing transactions.


In case one wishes to repatriate the funds outside India from an NRO Account to outside India or in an NRE Account, documentary proof of source of funds being used for repatriation and Form 15CA and 15CB, as applicable, will require to be submitted additionally. 



As such, it is always better for the remitter to stay informed about the funds' transfer process and related rules to have the money transfer executed smoothly. 



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