How Much Money Can Be Transferred from India to USA
Globalization has indeed reduced the physical distance among individuals and the nations altogether. Technology has further supported the concept of globalization by providing the requisite wings to such transactions happening globally. Such global transactions, however, do not merely restrict it to interactions among global people. Workflows across national borders and ideas and creativity too knows no boundaries these days. When such interactions happen across the borders, it is inevitable that even money circulates across the border easily. However, such financial transactions are governed by certain restrictions and limitations to such transactions. While some countries restrict the amount which can be freely transacted, some other imposes different tax brackets which have to be followed while transacting financially across the globe.
Tax Implications for Sending Money from India to USA
In India, such financial transactions are governed under the Foreign Exchange Management Act. Under the recent amendment to the Act in 2015, any individual can avail the facility of foreign exchange up to a limit of USD 25000 in any specific financial year (April to March) only for the following purposes, beyond which they need prior permission from the Reserve Bank of India. Transfer on these funds for these specific purposes would not attract any further tax as these amounts have already been applied suitable tax rates. The purposes for which such limits of transfers are applicable include:
- Gifting or donations
- Going to a foreign land for employment purposes
- Private visit or holiday in any foreign land except countries such as Nepal and Bhutan
- Maintenance of close relatives staying abroad
- Traveling for professional reasons which include attending specialized training, or conferences, among others
- Expenditure in connection with any medical treatment being pursued outside the country which includes attending a medical check-up outside or accompanying as an attendant with someone who is going abroad for a medical treatment or a medical check-up.
- Going abroad for pursuing a course of study
- Any other current account transaction
Such transactions of sending money from India to any other country including USA is usually done through a recognized bank in India where the person transacting has an account. This follows the KYC or Know Your Customer norms standardized by the Reserve Bank of India. Money is transferred from India can either be transferred via a wire transfer or a specific foreign currency demand draft. A wire transfer is usually considered to be a safe, easy, and a faster mode of transferring money. Funds were transferred from India to any other county can be done in any currencies including US Dollars, British Sterling Pounds, Euro, and Singapore Dollars by following the required mandatory procedures.
How Much Money Can Be Transferred from India to USA?
Indian Government allows a free remittance of UD 250000 each financial year (April to March) to any individual resident of India, including the minors, for making any capital or current account transaction or a combination of both such accounts under the Liberalized Remittance Scheme (LRS). In case a minor is the remitter of the amount, the form of remittance needs to be countersigned by the natural guardian of the minor.
Maximum Limit for Money Transfer from India to USA
Though there is no specific limitation or restriction to the frequency of remittances or money transfers from India to the USA, however, the amount of purchasing of foreign exchanges purchased needs to be restricted within the cumulative limit of USD 250000, under the LRS scheme, from all sources for a specific financial year for any resident Indian.