Government Regulations for Online Remittance of Money

Government Regulations for Online Remittance of Money

Online remittance of money is regulated by government rules and regulations. For sending money to India, the rules will differ according to the countries. Transferring from a country with a higher currency value, say Australia, the rules and conditions will be different.

While sending money from India, the government has defined rules and regulations that should be followed by the foreign companies, individuals, and natives of India. Depending on these regulations, the amount of sum that needs to be transferred is determined.
Foreign Exchange Management Act (FEMA), 1999 is the act under which all the outward online remittance of money is managed and regulated. The foreign trade and foreign exchange are regulated under FEMA
Approval of Transactions
All the outward transactions are regulated. There are predefined guidelines for the transactions that are allowed, prohibited, or require prior approvals for facilitation. These guidelines are listed in Section 2 (j) of FEMA.
Schedule I lists the transactions for which online remittance of money is prohibited. These include activities like lottery prizes, income from racing, and purchasing banned media, lottery tickets, or gambling credits.
Schedule II lists the transactions that require prior approval from the Central Government of India. Transactions like payment towards cultural tours, prize money from sports activities, and payments by PSU’s for advertisements in foreign media are mentioned under this schedule. The upper limit for the transactions is $100,000 .
Schedule III lists the transactions that require approval from the Reserve Bank of India (RBI). Business visits that exceed $25,000, private visits that exceed $10,000, and payment towards consultancy services for infrastructure projects that exceed $10,000,000; these online remittances of money require RBI approval.

Non-Resident Ordinary (NRO) Accounts
The foreign nationals living in India can manage their financial transactions with NRO account. This is the most common type of saving account for them. With this account, they can manage online remittance of money to their respective nation. However, the upper limit for remittances is $ 1,000,000 in an Indian financial year. The account holder needs to submit two chartered accountant certificates – Form 15 CA and Form 15 CB.
Liberalized Remittance Scheme (LRS)
This scheme allows individuals, both Indian and foreign nationals, to remit amounts from India. The only condition is that an individual should have an account in a bank that is authorized to carry out foreign exchange under FEMA. It should be active for at least a year. Some of the benefits of LRS are:
The upper limit for online remittance of money is $200,000 in an Indian financial year
Indian citizens are allowed to purchase shares and properties outside India. But, they should get an approval from RBI before proceeding. They can even open bank accounts with the international banks based outside India
If a foreign national wish to remit money, he or she must use their Permanent Account Number (PAN). This is required to prevent any fraudulent activities
Small Value Remittances
For those individuals who are not registered under LRS, they can opt for online remittance of money up to $25,000. However, they require a request letter from any authorized bank.
Other Remittance Options
Online remittance of money up to $100,000 is allowed without enrolling in LRS scheme. This is allowed for all the residents in India. But, the corporate and partnership entities cannot enjoy this benefit. The foreign transactions can be made for following purposes:
Education
Employment
Medical Treatment
Emigration
For Relatives
The foreign companies operating in India can opt for online remittance of money after completing all the formalities like payment of tax, submitting Balance of Payments, submitting auditor’s certificate, approval from the RBI, etc.
Online remittance of money from India is a complex task. People find online transfer procedures to be cumbersome task. But if you are aware of all the regulations for sending money to India , you can carry out transfers from major countries like Australia, US, UK, Russia with ease. There are various online remittance companies that can help you with the basic understanding of government regulations pertaining to online remittance of money.

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