Send Money Abroad from India - Guide for Students
As you prepare for your move to your dream school abroad, it's important to understand the process of sending money abroad for your fees. International remittances from India are regulated by the Reserve Bank of India, and only approved entities are authorized to offer this service.
Here's a straightforward guide to help you grasp everything about sending fees abroad.
Understanding the Legal Framework
The regulatory structure governing the administration of foreign exchange transactions in India is established under the Foreign Exchange Management Act, 1999 (FEMA), which was enforced from June 1, 2000.
To ensure sufficient foreign exchange services and effective customer support, the Reserve Bank has opted to issue licenses to specific entities, designating them as Authorized Dealers - Category II. These entities are empowered to conduct various non-trade current account transactions. Consequently, Authorized Dealers - Category II are authorized to release or remit foreign exchange for specified purposes as mentioned here.
What are the Methods to Send Money Abroad?
Whether you're financing part of the payment through a loan/scholarship or paying the full amount for tuition, international universities typically offer the following options for sending your fees to them:
Please do your own research to make sure that the online money transfer providers are actually authorised by RBI to remit money abroad from India, before making any payments to them.
Fees you Should Know About:
When transferring a significant amount of money for university fees, it's crucial to consider potential additional charges, as they can significantly impact the total cost. Here are some common charges you should be aware of:
- Exchange rate markup: Banks and financial institutions often apply a markup to the exchange rate when converting currencies, which can increase the overall cost of the transaction. By staying informed about exchange rates and comparing offerings from different financial institutions, you can potentially find favorable rates that minimize the impact of any markup. Almost every company out there would usually charge some markup, so it is about being aware of the inter-bank rates, and making an informed decision based on the exchange rate offered by the company, their reputation and quality of service.
- SWIFT fees/bank fees: For wire transfers or bank transfers conducted through the SWIFT network, there may be fees charged by your bank or intermediary banks involved in the transfer process. Typically this ranges from INR 200- INR 400.
- Transaction fees: In the case of transferring funds via credit or debit card, there may be transaction fees imposed by the card issuer or payment processor. These are often seen by customers later after the transaction, so be mindful of the charges for international spends on your card before you spend anything!
- Tax Collected at Source (TCS): While not technically a fee, TCS is an additional cost that you need to bear as part of the international transfer transaction. It is a tax levied by the Indian government on certain overseas remittances exceeding specified limits. Understanding TCS regulations allows you to plan and budget accordingly, ensuring compliance while managing the overall cost of your international transfer. Explained in detail in this article.
- Goods and Services Tax (GST): All foreign exchange transactions are subject to the levy of Goods and Services Tax (GST) in India. This tax is payable in addition to the other charges mentioned above.
Understanding Wire Transfers
Wire transfer involves obtaining the bank details of the recipient, such as the university, and initiating a transfer to their bank account. Most banks worldwide utilize the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system for wire transfers.
SWIFT is a messaging protocol connecting over 11,000 banks across 200-plus countries, facilitating the exchange of information and instructions for wire transfers.
To conduct a transfer via SWIFT, you need to provide precise details of the recipient's bank and the exact amount. Typically, the process takes 3-5 business days, though it may vary based on your bank and other factors.
Wire transfers from India offer students a convenient and secure method for paying university fees. The SWIFT payment system ensures reliability with its extensive network of over 11,000 member banks across 200 countries. Additionally, the standardized messaging system employs secure codes and tracks transactions from start to finish. Moreover, only specific authorized entities in India can process wire transfers, enhancing security by reducing the risk of unauthorized transactions.
Comparison Table of Wire Transfer Providers
Please note that TCS is not listed under "Extra Charges" as it is not considered an additional fee; it may be claimed against your tax return and is refundable. Additionally, each company mentioned applies its own exchange rate markup. For the best rate, please contact them individually.
Important Tips:
When sending money abroad, it's essential to prioritize security and reliability. Here are some key points to keep in mind:
- Choose the right international money transfer service: Take your time to research and select a reputable service provider. Look for companies authorized by the Reserve Bank of India (RBI) and holding an AD-II category license. This ensures that the service meets regulatory standards and provides a secure platform for your transactions.
- Verify recipient details: Double-check the accuracy of the recipient's information, including their bank account details and any specific instructions provided by the recipient or educational institution. Ensuring the correct details are entered minimizes the risk of errors or delays in the transfer process.
- Keep records of the transaction: Maintain a record of the transaction, including confirmation emails, receipts, or any other documentation provided by the money transfer service. This documentation serves as proof of the transaction and can be useful for reference or dispute resolution if needed in the future.
Supreme Forex: Trusted Remittance Partner for 2 Lac+ students
Supreme Forex is the digital brand of Supreme Securities Limited, a company with 28 years of experience and authorized by the RBI as AD-II dealer, thus enabling the company to remit money abroad for specified purposes.
We know it can seem like a daunting process, which is why we have experts who guide you through every step. Whether you prefer home collection of documents or a branch visit, both options are possible with us. Moreover, we have tie-ups with leading banks for various forex services, as well as global companies such as MoneyGram, Western Union, and Ria Money Transfer for inward remittance.
Here's how we can make this process easier for you:
- We offer the best exchange rate in the market.
- With our 28+ years of expertise, you can trust us to handle your remittance efficiently.
- Our offline branches in key locations such as Delhi, Ahmedabad, Hyderabad, and Kolkata ensure accessibility.
- Choose between home collection or a branch visit for KYC procedures.
- Rest assured, our operations adhere to RBI guidelines and regulations.
- Benefit from personalized guidance from our experienced currency experts throughout the process.
Call/ Whatsapp us now at +91 7303524400 for more information!
All other FAQs
- What is the upper limit of funds that can be transferred?
- Under the Liberalised Remittance Scheme, resident individuals can freely remit up to USD 2,50,000 per financial year for permissible transactions.
- What are the Documents Required in the process?
- A2 cum LRS declaration form.
- Photocopy of PAN card.
- Photo cum address proof of the remitter.
- Admission letter from the college or university abroad.
- Student's valid passport if remitter is a close relative.
- Other KYC documents if requested.
- What is the approximate transaction time for wire transfers?
- It takes 12 - 48 business hours for the transfer to be completed
- Who can send the fees?
- The sender must be the student or a close relative.
- The recipient must be a student currently studying or enrolled abroad.
- In special cases requiring a higher transfer limit, a formal request from the university with relevant student details is needed.
Sources
- https://www.kotak.com/en/digital-banking/insta-services/send-money-abroad/limitations.html
- https://www.icicibank.com/personal-banking/accounts/outward-remittance/wire-transfer
- https://www.hdfcbank.com/personal/pay/money-transfer/remitnow/fees-and-charges
- https://www.axisbank.com/retail/forex/international-fund-transfer/partner-banks#menuTab
- https://sbi.co.in/documents/16012/76239/Forex-service-charges_02072018.pdf
- https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=1834
