Outward Remittance is a process of sending money to a Foreign Account while you are a Resident of India, in short transferring funds from your account to a account which is setup in another country. The Service is approved under the FEMA (Foreign Exchange Management Act), allowing you to transfer money to most countries all around the world except a few like Nepal, Mauritius, Pakistan & Bhutan etc as per their regulations. The Payments made through this service is generally performed for situations where in you need to pay for medical treatment, donations, sending gifts, payments for your family members education, foreign travel expenses etc. In case you have gone abroad for some work or a holiday and have fall short of money, the only option left with you is asking your family members in your country to send you a payment, which is classified a Outward Remittance. All these payments are documented under the Foreign Inward Remittance Certificates.
The Reserve Bank of India calls these kind of payments as ‘Liberalized Remittance Scheme’ under which any Resident of India who has a Individual status can remit upto 2,00,000 USD in a given financial year through their Capital or Current Accounts. You need to have a Account with a Nationalized Bank or a well known Private Bank like ICICI Bank, following which you can send a Outward Remittance, while Non-Account Holders can still apply for a Demand Draft and get a payment sent for any of the following reasons.
1. Employment Abroad
2. Emigration
3. Maintenance of close relatives
4. Education abroad
5. Medical treatment abroad
The Money can be sent to abroad countries in the following modes only :
- Wire Transfer
- Foreign Currency Demand Draft
The remittance of funds can be done for the purpose of ‘maintenance of close relatives’ which covers the following persons :
(a) Members of your Hindu undivided family; or
(b) Your spouse
(c) You are related to the beneficiary in any of the manners indicated below:
Father, Mother (including step-mother), Son (including step-son), Son’s wife, Daughter (including step-daughter), Father’s father, Father’s mother, Mother’s mother, Mother’s father, Son’s son, Son’s son’s wife, Son’s daughter, Son’s daughter’s husband , Daughter’s husband, Daughter’s son, Daughter’s son’s wife, Daughter’s daughter, Daughter’s daughter’s husband & Brother (including step-brother), Brother’s wife, Sister (including step-sister) & Sister’s husband.
For Buying Shares : If you are planning to invest money in the foreign countries for buying shares then you can make a remittance under Liberalized Remittance Scheme with a maximum limit of 2,00,000 USD in a years period.
For Medical Treatment : In case you need to remit funds for the purpose of medical treatment expenses in the abroad countries then the transfer should not exceed more than 1,00,000 USD and this should be done in accordance with the estimate from Doctor from India or hospital abroad. If there is a higher requirement of funds then you need to seek approval from Reserve Bank of India for release of funds.
For Insurance Policy : If someone wants to buy a Life Insurance Policy from a foreign country then they are allowed to buy the same with no specific limits on the funds. While if you plan to buy a General Insurance Policy then you need to take permission from the Central Government for the same.
Small Value Remittances : When the remittances are in value of less than 5000 USD then they are listed under the Small Value Remittances. This is done through the outward remittance Request Letter and A2 Form. If the payment is made towards a purchase of good for personal use or if its for a subscription fees of some service or charges, then you need to provide the documentary proof of the transaction in the form of a invoice or debit note which is on the name of the Account Holder who is going to receive the funds.
Ram says
Amit,i am trying to buy a site [worth at least 15k USD] but could not get a credit card with such a high limit.What is the way to buy it,then?Is wire transfer the only option available to me as i am in India.Please help me with this,Amit.
Thanks a lot.
very eagerly waiting for your response….
Amit Bhawani says
Yes wire transfer is the best option available, though its recommended that you Escrow the payment for security for both sites of the parties.
Ram says
Thanks a lot,Amit.i will take your advice and do wire transfer.
Good day 🙂
TARIKA MALIK says
Amit,
My father is helping me out by giving me a gift in form of money for the EB5 Visa Program which requires me to invest 500,000 usd,but as the amount permitted is 200,000 only per financial year.One bank official suggested that each family member from india can send me 200,000 each,in this case my father,my mother and my brother as a consolidated amount.Or is it that each member in my family like my husband,my son and my self can recieve 200,000 each,but as a consolidated amount in my name.Is that true,if yes which is better to follow.
Thank you….
Edy Edy says
Hi Amit, can you tell me that can this facility be used for commercial purpose like buying from some company in usa and selling the stuff in India?
Can this be the right way of paying to that company?
Amit Bhawani says
Yep hopefully this option should work in that case.
Raghunandan ojha says
dear sir
i want to transfered 500/- EURO for Registration fee to attend international Coference for my Academic Purpose.
what document to submitt to the BANK.
what is the limit to transfered in personal Saving A/c.
Mohan Raju says
Dear Sir,
I had remitted 90 USD to a Chinese Company which sells Electronic Goods via Swift Transfer system. I have the letter from my bank confirming the payment and I had sent the letter to my Chinese Vendor also but they still insist that they have not received the Money. Kindly enlighten me what I can do to get the product or refund of money.
Luis Rodriguez says
Hi Amit.
I am a Foreigner National, holding a PIO Card (My spouse is half India, her father was Indian Citizen). I am in India since three months ago, I haven’t gone yet for the FRRO ( Foreign Regional Registration Office) Certificate to get a Permanent resident status. I have to do that in a couple of months only.
Can I send an outward remittance? Or Would I have to wait for the six months to get a permanent Resident status and then open an accunt with HDFC/ICICI.
I need to pay my Foreign credit card, Currently I am in India, and living and working and receiving a salary here with a temporary NRO account, that they told me at the bank that at six months has to be changed into a regular account but with the permanent resident status.
Many Thanks
krish M says
four of my friends want to buy a property at US and would like to remit accounted money of $200000 immediately. what are the regulations to be observed?
S.Ramamurthy says
Can a foreign national, employed in India, holding resident permit, send his earnings to his native country without restriction? is there any cap?
vijay deshpande says
Respected Sir,
I would like to remit US Dollar 500/= each as gift to my son,daughter-in-law,grandson and grand daughter at New Jersey.Similarly another USDollar 500/= each to daughter,son-in-law,and grand daughters(Twins).How I should proceed and what bank details are required if the amount is to remitted by Telegraphic Transfer ?
please reply,
thanks and regards.