Transferring money to India is now very easy – with lots of options available ranging from cheque, draft, instant wire transfer, etc. Still, there are some things to consider before initiating your transaction. Here are a few considerations to keep in mind when transferring money to India:
Do make the most of Western Union services. Service fees are fairly low and you’ll get a receipt of your transferring money to India with each transaction. You have options for sending money online or through a toll-free number.
Don’t forget to make sure your online transactions are secure. Make sure you’re dealing with an authorized service that is backed by some form of guarantee. Make sure you’re transferring money to India through an authorized service provider who can provide some form of insurance if necessary.
Before choosing a money transfer service consider the Credibility is the reliability of a company. With so many companies, it becomes very important to choose correctly. There is no point in choosing a company just because it provides a great exchange rate or charges very little fees. It could just disappear with your money!
The next factor to consider is the exchange rate. The exchange rate differs from companies to banking institutions. Most of us think that due to competition and regulations the exchange rates are similar for all these services. That is not true. It is for us to consider the situation and then decide which service to use.
Another important factor to consider is the fees charged by the company. If a company offers transactions at a very low service charge, then you can be sure that their exchange rate is poor. Some companies charge the fees based on the amount sent only during some also consider the final destination for the fees.
If you send money to your own account in India whether NRE, NRO, or any other account in India, there will not be any tax on the transaction. You can use the money for any purpose you desire. However, any income arising out of the amount invested in India will be taxed.
If you send back money to your resident relative’s bank account this is treated as a Gift to the relative. This gift will be tax-free in the hands of both, the gifter as well as the beneficiary. However, any income arising out of this amount will be clubbed with the gifter, if the transferring money to India to certain individuals like spouse as per the Gift Tax Act.
If you send back money to your non-relative’s bank account gifts in the form of cash from non-relatives were exempted up to a limit of Rs 50,000 a year (if the sum exceeds Rs 50,000, then the entire amount is eligible for being taxed).
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