Every country has its own guidelines on the money going in and going out. This includes India which is a country known for its economy thrives. The country has legislation known as the Foreign Exchange Management Act (FEMA) that is in charge of regulating the money flowing in and out of the country and is known as FEMA guidelines for outward remittance. FEMA guidelines for outward remittance should be followed to the letter. The legislation is not set by the politicians but by Reserve Bank of India which is the Central Bank.
What Is The Purpose Of FEMA?
This legislation has its purpose and by all means necessary, it must fulfill its purpose. There are laid out FEMA guidelines for outward remittance that it must adhere to. It has two main purposes.
The first thing that the legislation does is to ensure that the money that gets into the country neither comes from criminal activities nor funds them within the country. There are organizations and people that fund criminal activities such as terrorist acts and with the FEMA guidelines of outward remittance; the country is able to control this.
The second purpose of FEMA is to ensure that the money sent outside the country is not in excess.
What Is Outward Remittance?
The world has become more connected thanks to technology. Today, it is possible to send money to a loved one, a friend or for payments outside the country. You are probably wondering what an outward remittance is. If you work or live in a country that is not your own and you send money back home, you will be doing an outward remittance. When it comes to this kind of remittance that is also known as wire transfer outward remittance is that you have several options to send the money. You can use specialist services or those of a traditional bank.
What Determines The Fees Charged?
There are several factors that will determine the charges for your outward remittance. It’s important that you get the actual fees from the bank or specialist before sending the money. This is because the details of the transaction, the sender’s and the recipient’s bank account will matter. It’s good to note that there is no specific amount for the outward remittance.
FEMA Guidelines For Outward Remittance
The laid out guidelines should be followed to the letter otherwise it will not be possible to send money outside the country. As you plan to send money outside the country FEMA guidelines for outward remittance allows you to send money for various things such as
- You can send money for medical care
- You can send money for the upkeep of a student and their school fees
- You can send money to support your family members
- You can send money to take care of travel expenses that include tourism
- You can send money for donations and gifts but it is highly recommended that you check whether the organization you are sending to qualifies to receive money from the country
- You can send money for legal investments such as for real estate, government securities and for the stock market
On the other hand, when it comes to FEMA guidelines for outward remittance, there are sources that you are not allowed to send money from. If the money comes from sources that do not qualify as per the FEMA guidelines for outward remittance, then it will not be possible for you to send the money.
- There are specific types of income that has been indicated thus you need to refer to the guidelines
- Proceeds from activities such as gambling and lottery winnings
- Some company dividends are also listed in the guidelines