Sending or receiving money from India to a foreign country can often be a daunting procedure for both foreign businesses and the people living here in the country. There are various schemes and regulations that state and limit how much money can be remitted or sent and for what purpose. Outward remittance has to be approved under the Foreign Exchange Management Act (FEMA), 1999. This act regulates all transactions involving foreign exchange. This article explains the basic procedure for inward and outward foreign remittance.
Inward Remittance is used for remittance from an Overseas Bank to a Domestic Bank. Inward Remittance can be made against Export of Goods/ Services, for Investment purposes, Donations, Gifts, etc.
There are two things which have to be specially kept in mind and that are as follows:
At the start, the Sender of money which is the Remitter goes to his bank account and submits the request for payment into the receiver’s (Remittee) account.
For remittance the basic and mandatory information required by the Remitter bank of Remittee are:
After completing the transaction the Remitter Bank also provides an acknowledgment of transfer which the Remitter has to submit to the Remittee.
After finalization of the transfer, the Remittee bank holds the amount for Procedural completion and the compliance check. The Remittee then has to contact his or her bank and should have to submit all the required documents asked by the Bank.
The documents that are required by the Bank are as follows:
Bank Generally takes 1-2 working days to complete this whole transaction. If working for the first time, inward remittance to the Bank usually takes 3-4 working days.
The Bank charges are generally nil on inward remittances. However, the Bank charges GST on their fees. So, the GST should have to be paid to the Bank.
Another thing that is observed is that there is a difference in the Exchange rate and the rate at which the bank clears your funds. This is most of the case fall from 50 paise-70 paise per dollar.
So, overall your deduction in inward remittance falls to around Rs 1 per dollar.
An Outward Remittance is a process of transferring money in the form of foreign exchange, by a resident in a particular country, for instance, say India, to a beneficiary who is located outside the other country (except for Nepal and Bhutan) for any purpose and that is been approved under the Foreign Exchange Management Act (FEMA).
According to the Liberalized Remittance Scheme (LRS) made by the Reserve Bank of India (RBI), it is compulsory to quote PAN number for remittance transactions which take place from India to Abroad.
Banks are given a strict warning to report all LRS transactions to RBI, irrespective of Amount unlike earlier, and it is also expected that there would be regular checks to ensure that everyone is complying with the LRS rules every financial year.
Suggest Read: Funding of Indian Subsidiary in India
7 Essential Skills CAs Should Learn in 2025 for Growth As a content writer at Ebizfiling, I interact with Chartered…
Expecting a Tax Refund but Got a Demand? Understand Your 143(1) Notice Introduction If you were expecting a refund after…
Form 15H for PF Withdrawal Online Introduction Filing Form 15H for PF withdrawal online is an important step for anyone…
Income Tax Rates for Co-operative Societies – Past Seven Years Introduction Co-operative societies in India are entities registered under cooperative…
CBDT Latest News: Due Date Extended for Audit Report Filing for FY 2024-25 Introduction CBDT latest news confirms an important…
Can We File Joint Application for Trademark Registration in India? At Ebizfiling, we often receive this interesting query from founders…
View Comments
There is no set time limit; however, the conversion of money takes time and is dependent on how banks operate.
To know more about this call on +919643203209 or you can mail us at info@ebizfiling.com
Thank you.
Hello B.N. Ram,
If you have an FCRA Registration, you can receive charity funds from US Dollars to Indian Rupees at any time. There is no time limit for the same. Contact us at +919643203209 / mail us at info@ebizfiling.com, if you need any additional information or assistance.
Thank you for the query.