When you are studying or doing a job in a foreign country, you may be required to send money from time to time to your family, friends, relatives etc. In order to perform remittance in a foreign country, you need to understand the process of inward remittance and the appropriate and legal channels to do it. International money transfers are done as per the FEMA or Foreign Exchange Management Act. Let’s check and understand all the processes involved in remittance in foreign currency.
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What is Remittance in Foreign Currency?
Remittance refers to the process of transferring money from one country to another. In the context of Indian students studying abroad, it involves sending or receiving funds from or to India to cover tuition fees, living expenses, or other educational needs. This transaction is typically facilitated through banks, authorized money transfer services, or digital payment platforms. RBI monitors all inward and outward remittances so that the transactions can be done safely without any illegal channels.
Also Read: Check here how to download Form A2 State Bank of India and use it for international money transfer and Forex cards
Key Channels for Foreign Currency Remittance in India
Students and their families can choose from several reliable channels for remitting foreign currency. The best banks for inward remittance are the one that charges lower exchange rates and transfer fees. Banks are a trusted option, offering services like education loans and seamless transfers, though they may have higher fees. Authorised money transfer services such as Western Union and MoneyGram provide fast, convenient solutions, especially for smaller amounts. Check details on key channels for remittance in foreign countries below.
Banks
Indian banks are the most trusted and widely used channel for remittance. Many banks provide tailored services for students, including education loans and simplified transfer processes. You can make the process of inward remittance more convenient by understanding and using NOSTRO and VOSTRO accounts. The banks in India like HDFC Bank, State Bank of India etc provide such services abroad at affordable fees.
Authorised money transfer services like Western Union international money transfer, MoneyGram, and Ria are popular options for inward remittance. These services are widely accessible, offering multiple payout options such as direct bank transfers, cash pickups, or mobile wallets. Known for their speed and global network, they ensure that funds reach students promptly, often within minutes, making them a reliable choice for emergency or regular financial support.
Foreign Exchange Dealers
Foreign exchange dealers play a crucial role in facilitating smooth currency transactions for Indian students and working individuals abroad. These RBI-authorized entities specialize in buying and selling foreign currencies and offer services like direct remittance to international bank accounts or fee payments to educational institutions. They often provide competitive exchange rates and personalized assistance, making them an excellent choice for large transactions such as tuition fees or initial living expenses.
Important Regulations for Remittance in India
The Reserve Bank of India (RBI) regulates all foreign currency remittances under the Liberalized Remittance Scheme (LRS). Some of the key aspects include:
- Annual Limit: Indian residents can remit up to USD 250,000 per financial year.
- Purpose Code: Students must specify the purpose of the remittance, such as education or maintenance expenses.
- Tax Deduction: Tax Collected at Source (TCS) may apply to certain remittances, which can be claimed as a refund later.
Also Read: Planning to open a bank account abroad? Check here all about the HSBC International Student Account
How to Remit Foreign Currency for Education?
Compare exchange rates, transaction fees, and processing times. Banks are reliable but may charge higher fees, while online platforms often offer better rates. Keep the required documents handy so that you can produce them when demanded. Visit the bank, authorised dealer, or online platform, provide the necessary details, and initiate the transaction. Always double-check the recipient’s bank account details to avoid errors. Some of the major documents include:
- Admission letter from the university
- Passport and visa copy
- Fee structure or invoice
- PAN card for transactions over INR 50,000
Understanding remittance in foreign currency is a cornerstone of managing finances for Indian students studying abroad. By selecting the right channels, staying informed about regulations, and planning strategically, students and their families can ensure a smooth financial journey. Check some common FAQs based on remittance in foreign currency below:
FAQs
Foreign currency remittance is the process of transferring money from one country to another. For Indian students, it typically involves sending funds abroad to pay for tuition fees, living expenses, or other educational costs.
The LRS allows Indian residents to remit up to USD 250,000 abroad per financial year for specific purposes like education, travel, or medical treatment, regulated by the Reserve Bank of India (RBI).
Key documents include a valid passport, visa, admission letter, PAN card, and the university’s fee structure or invoice. These ensure the funds are used for the intended purpose.
Popular channels include banks, authorized money transfer services (like Western Union), online platforms (like Wise), and foreign exchange dealers, each offering unique benefits.
The time varies by channel. Bank transfers may take 1–3 business days, while services like Western Union or online platforms often provide same-day or instant transfers.
Yes, remittances over INR 7 lakh are subject to a 5% Tax Collected at Source (TCS) under the LRS. This amount can be claimed as a refund when filing taxes.
Students can receive funds through their international bank accounts, cash pick-up services offered by money transfer companies, or digital wallet transfers.
Use online tools, mobile apps, or alerts from banks and money transfer platforms to monitor currency exchange rates and remit funds when rates are favourable.
Banks and foreign exchange dealers are reliable for large transactions like tuition payments, as they offer secure and direct transfers to universities.
Yes, reputable platforms like Wise and Remitly use advanced security measures to protect transactions, offering competitive rates and faster transfers for convenience.
To know more about education loans, 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.
