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Sending money across different countries is often complex because the funds must be sent through international payment networks.
You can make an inward or outward remittance, depending on the transaction purpose. Both international remittance transactions are subject to FEMA (Foreign Exchange Management Act) Regulations and must be made through an Authorised Dealer (AD).
An inward remittance means the transfer of funds into India from outside India. As a non-resident Indian (NRI) living overseas, you may want to send money back to India to support your family, to save money or for other purposes.
When sending an inward remittance to India, you must:
An inward remittance arrives in a foreign currency. It's then converted to Indian rupees at the prevailing exchange rate and credited to the recipient's bank account.
Outward remittance means the transfer of money from India to another country or region. This may be to cover tuition fee or living expenses, pay for medical treatments abroad, buy assets, and more.
You can use HSBC Global Money Transfers to send money to over 20 countries, instantly and fee free. You can also remit to other third-party HSBC accounts, all through your HSBC India mobile banking app.
As per FEMA Regulations, residents:
Additionally, as per the provisions of the Income Tax Act, TCS (Tax Collected at Source) provisions are also applicable at specified rates for remitting funds outside India. Find out more about the fees and charges for international remittance through HSBC.
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In an inward remittance, the initiator of the transaction is the person sending money from outside India. They are also undertaking procedural compliances to conclude the receipt of funds.
For outward remittances, the account holder sending money outside India initiates the transaction along with necessary documents and declarations as required under the Reserve Bank of India (RBI) Regulations.
Foreign currency inward and online outward remittances at HSBC are processed through the SWIFT (Society for Worldwide Interbank Financial Transactions) messaging system. Global Money on the HSBC India app, on the other hand, uses an internal messaging system which costs less.
International remittances enable a smooth flow of funds across different countries. On a macro level, inward remittances increase the flow of foreign currency within India, thereby allowing a higher supply of such currency in the country. This, in turn, leads to an appreciation in the value of the Indian rupee against such currency.
Remittances are integral to the smooth functioning of a developing country like India, which is now connected across different geographies.
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Note: The information provided in this article is for informational purposes only. You may consult professionals for specific guidance for the applicable Income Tax rules and FEMA Regulations, as these are subject to changes.
Disclaimer: This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC), India, Incorporated in Hong Kong SAR with limited liability, for the information of its customers only. This publication does not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe to any product / investment. The information herein is derived from sources believed to be reliable and the concerned Information Provider(s) have duly authorized HSBC to use such information provided by them. Whilst every care has been taken in compiling the information, HSBC and the concerned Information Provider(s) do not guarantee, or make any representation or warranty and accept no responsibility or liability as to its accuracy or completeness and shall not be liable for damages arising out of any person's reliance upon this information or any action taken or not taken as a result of any material contained in the publication. Expressions of opinion are those of HSBC and the Information Provider(s) only and are subject to change without notice. HSBC has not independently verified any information provided by the Information Provider(s) or that has been derived from the sources believed to be reliable by HSBC. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. This document is for circulation in India only. No part of this publication may be reproduced or stored in a retrieval system without the prior written permission of HSBC. Any liability is accordingly expressly disclaimed by HSBC, its officers, directors and employees.
