Remittance to India: A step by step guide

With millions of Indians living outside of the country, India is actually the top place in the world for remittances, with over $79 billion sent in 2018¹. But if you are unsure about what it all means and how to look for a good money transfer provider to send money to family or businesses in India, you’ve come to the right spot.

We’ll walk you through what it means to remit money to India and what all you need to know to have it go smoothly. Questions on taxation for NRIs or remittance charges? We got that covered that too.

How do I remit money to India?

To remit is technically defined as sending money as payment, and remittance is the way it is sent² ³. Just a few decades ago there were very few ways to send money to India, if at all. But now you can remit money not only through your bank, but also different online and in-person providers that specialize in getting money to where you need to go. You can have money deposited straight into your recipient’s personal local bank account in India, or have them pick up the cash in person.

Let’s go through the steps to remit money to India

1. Choose your provider

The most important decision you’ll make in this process is deciding which money-transfer provider to go with. You will want to choose one that works best for you and your unique transfer. The different factors to look at when assessing a remittance provider are:

• How you do the remittance- do you want to do it online, on an app or in person?
• Does your recipient want the money in their bank account or in cash?
• How quickly do you need the money to get there?
• What methods of payment does the remittance provider require?
• What are the fees and exchange rates of the transfer?

If, for instance, you want to be able to do the remittance from your kitchen table to a local bank account and want it there within 2 days, there are going to be certain providers that fit the bill. If you would like to carry out the remittance in cash and your recipient wants hard currency too, there is going to be a provider for that too.

The biggest differentiator between all the providers is going to be the exchange rate and fees. Each company or bank is different, so it is best to do your research so you’re never overpay for a remittance

2. Enter the recipient details

Now that you have chosen which provider you are going to go with, it’s time to start collecting all the information you will need

For online transfers to an Indian bank account, you will need to get your recipient's name, address, bank account number, and bank branch’s IFSC- Indian Financial System Code. Their email address and mobile number will also typically be asked for so they can be notified when the money comes in.

To remit money for a cash pickup, you will need to carry ID and provide the exact details of your recipient. Your recipient will also need to carry ID and the transfer reference code to verify the pickup.

3. Make the payment

The usual ways to make the transfer payment can be-

• Debit card
• Credit card
• Bank transfer
• SWIFT
• Cash in-person

Often the fees you will pay depend on this payment method. Bank transfers can take longer to clear but can be the cheapest. While credit card payments are faster but you may also be charged extra by your credit card company.

The first four also can be done online or by your provider’s app. To pay for the transfer in cash will require you to go down to the nearest centre to carry it out.

4. Recipient gets the money

Depending on your provider, your recipient can get the money directly in their local bank account or pick it up in cash from a local affiliate. Some providers are actually also offering options for the money to go directly to a mobile or airtime top-up.

In most cases in India, the recipient will be notified by SMS or email of the money coming in.

Sending payments to India? Save with Wise.

Over 6 million customers have chosen Wise to send money around the globe. Wise only charges one upfront low fee and uses the mid-market exchange rate on every transaction.

That’s it. And if you send money on one of the popular routes to India, your transfer could be there within a day. Plus, the award-winning Wise app makes it super simple to make a transfer.

Is NRI remittance taxable in India?

Short answer, no. Long answer is that since India is part of the Double Taxation Avoidance Agreement, if you have paid taxes on earned money abroad and are sending it to a family member or close relative back in India, the money is non-taxable for the receiver.

Remittance charges

The charges for remittances depends on the type of provider you choose. But you can always expect some form of a transfer fee for the service. On top of that, some providers set their own exchange rate at one that is higher than the rate the banks or providers use themselves.

The real exchange rate is the interbank exchange rate which is the one you usually see on Google. But some money transfer companies will set their rate weaker than the interbank exchange rate to hide another fee. A few modern providers, like Wise, are using technology to decrease the cost of money transfers and setting the exchange rate at the real exchange rate. So they pass on the savings to you.

Additionally, some providers will charge extra fees for cash pickup or depending on the payment method or currency conversion fee. That’s why it is best to do your research and make sure you read the fine print for whichever transfer that you use.

Sources used for this article