Transferring money from anywhere abroad to India might seem like a difficult task, but it’s easier than it seems. Whether it’s for buying a property or to invest in a business closer or to send money home anywhere in the world hasn’t been easy than it is today. Let’s take a look at 3 different types of accounts you can use to send money to India.
The Non-Resident External account can be in the form of savings, current, recurring or fixed deposits. The income that you deposit in this account must be earned outside India. NRE accounts are exempt from tax and also, doesn’t have any limit on remittance.
Also, you don’t have to worry about converting your currency as no matter which currency you deposit, withdrawal happens only in INR from all NRE accounts.
So, buy that house in your picturesque hometown or send money to your parents for their next vacation without worrying too much about the taxes and money transfer woes.
You can use the Non-Resident Ordinary account to manage your income earned in India such as rent, dividends, and pension from abroad. As you deposit the money you have earned in India in this account, the income is taxed. Interest earned on this account is also subject to taxes.
Also, when it comes to remittance, RBI has a Cap of USD 1 million beyond which the account holder can’t withdraw the money in a given financial year. Use this account for only for specific purposes as indicated above.
3. FCNR Accounts
Foreign Current Non-Repatriable accounts are fixed deposit accounts only. You can use the amount in FCNR accounts to make the payments in India. Not only this, you can also hold this account jointly with an Indian resident and give them the power to operate the account. As for the taxes, just like NRE accounts, the interest earned isn’t taxed for FCNR accounts.
These are by far the simplest ways to transfer money to India for all your personal spending. Though the procedures are fairly simple, you must keep in mind few things before you head to transfer your hard-earned money to your homeland.
Tax on Global Income
There are few countries such as the USA who levy taxes on the global income earned by its residents. Therefore, even though your income isn’t taxed in India, it might get taxed in the country of income source.
Double Taxation Avoidance Agreement
Most countries have this agreement with India where one income cannot be taxed in both the countries. But for countries that haven’t signed this agreement, your income will get taxed twice and you will lose out on quite a big chunk of your hard-earned money.
Assess Your Fund Remittance Purpose
All the 3 accounts function for different purposes and you must evaluate your reasons to transfer money to India before you transfer via any of the accounts.
For example, if you want to send money to your family for their personal expenses, NRE is the best choice. Whereas if you want to store your income earned from your investments in India, NRO is the best.
If you don’t need to withdraw the cash from income earned in India, transfer it to FCNR account. Your idle sitting money will earn good interest and at the same time will be easily accessible in India.
Opening NRI accounts and transferring money is fairly simple. But in case that too seems like a lot of hassle, simply visit Thomas Cook offices to transfer money to your relatives in India.
Thomas Cook gives you excellent foreign exchange rates and ensures a hassle-free money transfer to India. Walk into their nearest branch to remit money to India effortlessly.