The travel ban and the global lockdown have left many with their kith and kin stranded in various locations abroad. The only succour most have is the financial support their families can lend them from India.

The RBI, under the Liberalised Remittance Scheme (LRS), permits resident individuals including minors, to freely remit up to $2,50,000 in any financial year for permitted transactions. Education, maintenance of relatives abroad, gift, donation and travel are a few examples of such permitted transactions.

Though many states in India have slowly started lifting lockdown restrictions and banks are increasing their staff strength, you may still want to continue social distancing and stay home. If you want to get your foreign remittance request processed at home, here are some digital remittance options.

Internet banking

Most banks permit their account holders to transfer funds abroad using their internet banking facility. While customers need to be registered with the internet banking facility, in all cases, some banks such as SBI, also require customers to register separately for the online remittance facility, as well.

Post this, akin to a domestic fund transfer, all you need to do, is to punch in the details of the beneficiary (name and bank account number) and proceed with the transaction. The time taken for both adding the beneficiary and processing the transaction, however, vary from bank to bank. For instance, HDFC Bank takes 30 minutes to add a beneficiary; it processes all remittance requests submitted before 2.30 PM on the same day.

In the case of SBI, the activation of a new beneficiary will be made on the next day. The bank permits a maximum of three beneficiaries to be added in a single day.

Limits

For online foreign remittances, while the overall limit of $2,50,000 under the LRS (remitted or purchased through all sources in India in a financial year) shall apply, banks also have different per day and per transaction limits. For instance, HDFC Bank has set a minimum limit of $100 and maximum limit of $12,500 per transaction, for customers using their online facility ― Remit Now . Customers of the bank will have to visit the bank’s branches for transactions above that limit.

For Axis Bank’s customers, the per day transaction (maximum) limit through their internet banking facility is set at $25,000, and for SBI’s customers, the limit is ₹10 lakh per transaction. That apart, during the first five days of activation of a new beneficiary, SBI’s customers cannot remit more than ₹50,000 (in aggregate) through the online facility.

Commissions & charges

Most banks in India permit remittances under the LRS scheme, to almost all countries, except those blacklisted by the Financial Action Task Force or those mentioned in the OFAC (Office of Foreign Asset Control - Department of the US Treasury) sanctioned countries list. For instance, SBI customers cannot use the online remittance facility to remit money to countries such as Pakistan and Iran.

The number of currencies that banks remit monies in, vary from bank to bank ― the maximum being 20 currencies offered by ICICI Bank. In the case of SBI, customers can only remit funds in five currencies ― USD, EURO, GBP, SGD and AUD ― to more than 200 nations.

The exchange rate for these currencies — also known as Telegraphic Transfer (TT) Selling Rate (relevant for outward remittances) — also varies from bank to bank and is published on their websites daily.

Banks charge commissions on foreign outward remittances. For instance, HDFC Bank levies a flat fee of ₹500 for remittances up to $500 (or equivalent for other currencies), through Remit Now . For transactions above $500, the fee is ₹1,000.

For SBI customers, the bank fee (including correspondent charge) works out to $11.25, GBP 10, EUR 13, AUD 15 and SGD 20, for the respective currency remitted.

Axis Bank has however, waived its commission charge for transactions initiated through internet banking.

Available for all

For those of you who wish to remit money abroad but haven’t yet registered yourself on your bank’s net banking facility, you can try using DCB Bank’s Remit facility. Not only is this facility available for all customers ― including non-DCB Bank customers, but the bank also charges no commission or charges on foreign remittances.

While the registration for DCB Remit is simple ― all you will need is a PAN card ― customers should note that the bank account from which the money to be remitted is transferred, should essentially be of the PAN card holder. Also, the bank only permits a maximum of $25,000 to be remitted in a financial year, per remitter. For transactions above this limit, customers would need to visit the bank’s branches.

ICICI Bank’s Money2World facility also permits other bank customers to remit money abroad. However, unlike DCB Remit, the registration is not online. One will have to visit the bank’s branches to complete the Know Your Customer (KYC) process. That apart, a commission of ₹750 is also charged on remittances using the Money2World facility.

Non-bank transfer agents

For your remittances abroad, you can consider approaching a non-bank authorised dealer as well. The RBI has authorised several non-bank dealers, such as Thomas Cook, and Ebixcash World Money, among others, for such purposes. Given the lockdown, most of them now allow remittances only on their online platforms. The rates and limits vary for each authorised agent. For instance, in the case of online remittance through Thomas Cook, you will have to pay a foreign bank charge (flat fee) of $8 for transactions up to $5,000 and a fee of $11 for transactions above $5,000. However, the said charges shall not be applicable for transactions below $100 and above $1,00,000.

Taxes

Aside from commissions and currency exchange rates, taxes can also affect your outflow of funds. On money changing transactions, GST will be levied at 18 per cent on the taxable value. Slabs (on the gross value of foreign currency exchanged) have been defined for the computation of taxable value of service. However, the slab structure limits the taxable value to a range of ₹250 to ₹60,000. Hence, the GST levy can range from ₹45 to ₹10,800.

Besides, starting October 1, 2020, banks will have to collect tax collected at source (TCS) at the rate of 5 per cent, if the amount remitted in any financial year exceeds ₹7 lakh. TCS will only be levied on the amount remitted above ₹7 lakh.

Also, if the foreign remittance is a loan taken from a banking company or institution for educational purpose, then the TCS will at 0.5 per cent only.

Take note of

- Commissions

- Forex rate

- GST and TCS on forex remittances

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