Limits of International Money Transfer as per the RBI Guidelines

Limits of International Money Transfer
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Limits of International Money Transfer: You might want to transfer money abroad for your child’s education or a relative’s medical purposes. To allow Indian citizens to transfer money internationally the RBI introduced a Liberalised Remittance Scheme (LRS). Any transactions made to beneficiaries outside India have to be done considering the rules of this scheme which falls under the Foreign Exchange Management Act, of 1999. Let’s learn all about the limit of International Money Transfer in this blog.

Also Read: Check out the FAQs on the Restructuring 2.0 Scheme of RBI that provides benefits to the borrowers affected by the COVID-19 pandemic. 

What is the limit of International Money Transfer? 

The limit of International Money Transfer as per LRS is USD 250,000 (INR 2.7 crores) in a financial year for purposes like education, travel, investments or medical treatment. Earlier this limit was set to USD 25,000 in a financial year but was upgraded in the year 2015-16. The limit of remittances for an NRI is set to USD 1,000,000. 

However, if an individual needs to transfer more than the prescribed limit of international money transfer, then they must seek permission from the RBI. 

What is Liberalised Remittance Scheme?

The Liberalised Remittance Scheme is a scheme introduced by the Reserve Bank of India to regulate the amount of funds that can be transferred across borders. It also regulates the limit of international money transfers and the process of how Indian residents can transfer money to other countries. 

According to the Liberalised Remittance Scheme, minors are also allowed to make international money transfers once the natural guardians of the minors sign the A2 Form in the LRS declaration form. 

Here’s the list of purposes permitted by the RBI under which Indians can transfer money internationally- 

  • Pay education fees in another country
  • Help family members who live abroad
  • Medical treatment 
  • Gifts and donations
  • Cost of tourism and travel
  • International business trip
  • Emigration

If you are facing issues in understanding Terms related to International Money Transfers, check out our blog to get yourself acquainted with them. 

What are the ways to make International Money Transfers? 

Before, we know about the payment methods, it is also important to consider the tips for the cheapest international money transfers. You must also decide on which method an individual can choose to transfer money internationally like online wire transfers, bank drafts, cashier’s cheques, or UPI. Let’s have a look at these methods- 

Online Wire Transfer

You can easily transfer money internationally through wire transfers and it is one of the safest ways to transfer money. The maximum limit for international wire transfers should not exceed USD 10,000. Transactions of more than USD 10,000 need to be reported to the IRS (Internal Revenue Service). 

You would need to log in to internet banking and gather necessary information like –

  • Your bank account number
  • Recipient’s name
  • Recipient’s bank name and address
  • Recipient’s bank SWIFT Code
  • Recipient’s bank account number

You need to fill out the wire transfer form (online or offline), select the currency and mention the recipient’s bank account number, and the amount to be transferred. International wire transfers can take up to five days, or sometimes more. Here’s how you can check the status and track your international wire transfer

Also Read: Wire transfer is one of the fastest and most secure methods of transferring money. Check out the Benefits of Wire Transfer in our blog. 

Bank Drafts or Cashier’s Check

Bank Drafts and Cashier’s Checks are cheap methods of transferring money internationally but the complete process takes a long duration. They are easily available at the bank’s branch. Visit there to purchase the drafts and cheques in the currency of the country you want to transfer money to.  

UPI Transfers

Unified Payment Interface is a popular method of transferring money between beneficiaries. Users can now transfer money through UPI across borders. The first step is to activate UPI International and scan the international merchant’s QR code. Then, enter the amount in payable foreign currency and confirm your payment by entering the UPI PIN. 

Some of the applications through which international UPI transfer can be made are as follows- 

  • Wise
  • PayPal
  • Western Union 
  • MoneyGram
  • Remitly

Note: International transactions are similar to domestic transactions, with the only difference being that banks apply foreign exchange conversion rates and applicable fees to complete the transactions. 

FAQs on the Limit of International Money Transfer

What is the Liberalised Remittance Scheme?

The LRS Scheme allows Indian residents to remit (transfer) money abroad for diverse reasons. The scheme permits resident individuals to transfer a specific amount of money in a financial year for certain purposes, such as travel, education, investments, etc., to beneficiaries outside India.

What is the limit of foreign money transfers?

According to the Liberalised Remittance Scheme by the RBI, Indians can transfer USD 250,000 per financial year. For an NRI, the limit is set to USD 1,000,000. 

What is the maximum amount for international wire transfers?

The maximum limit for international wire transfers should not exceed USD 10,000. Transactions of more than USD 10,000 need to be reported to the IRS (Internal Revenue Service). 

What are the methods for making International money transfers?

An individual can choose to transfer money internationally through online wire transfers, bank drafts, cashier’s cheques, or UPI.

What is the tax on international money transfers?

International money transfers are subject to tax deductions. There will be a deduction of 20% on all international remittances except for education and medical treatment. 

This was all about the limits of international money transfers. An individual can transfer USD 250,000 (INR 2.7 crores) in a financial year as per the LRS. The limit of remittances for an NRI is set to USD 1,000,000. The maximum limit for international wire transfers should not exceed USD 10,000. Transactions of more than USD 10,000 need to be reported to the IRS (Internal Revenue Service). Transferring more than the limit of international money transfers as prescribed by the RBI needs to be taken permission from them. 

To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience. 

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About Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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