Want to send money from India to Canada?
Has any dire necessity to transfer funds immediately?
If then, you don’t need to worry because a hassle less transaction from India to Canada is now possible with the vast number of amenities available.
Whatever your requirement for fund transfer is, before sending money abroad from India to Canada, you need to have a proper understanding of the money transfer process to abroad for evading the troubles associated with the forex market. Getting to know more about the international fund transfer process is an added benefit as it will help you send money from India to Canada safely and securely.
Now, let’s discuss the overseas fund transfer process in detail…
How to send money from India to Canada?
- First, approach any authorised dealers near you for your overseas money remittance.
- Then check the current exchange rates before processing your transaction.
- You can now provide the required KYC as instructed by the service provider for verification. Once verified, you can send money from India to Canada via NEFT/RTGS.
- Now fund transfer will be started once the amount is credited.
Mediums of fund transfer from India to Canada
- Wire Transfer/ Telegraphic Transfer (TT)
- Foreign Currency Demand Draft (DD)
Significant purposes of fund transfer to Canada from India
- Education fee payments to universities or colleges in Canada
- Living expenditures of Indian students in Canada
- Fund transfers to close relatives in Canada
- Remittance by tour operators
- Emigration/Visa fees
- Fee for participating in international events and conferences etc.
Documents required to send money to Canada from India
- PAN card copy of the remitter
- Duly filled A2 form cum declaration with customer signature
- Another KYC, as requested by the authorised service provider
Details of beneficiary required:
- Bank Name and address of the beneficiary
- SWIFT code and Transit code
- Beneficiary’s account number
Let’s summarise the crux of the whole process here. While you step out to send money abroad, always remember approaching an authorised dealer with a valid licence from RBI to have a secure transaction. Also, keep the required KYC ready and beneficiary details to avoid unnecessary delays. You can step out and remit money to Canada without any worries and hesitations.
Tax on money transfers from India to Canada
There are undoubtedly tax issues when money is sent from abroad to India. If you’re the one sending money, you’re probably thinking about how much tax you’ll have to pay in your own country for sending money to India. If you are a resident Indian receiving money from overseas, on the other hand, you would want to know if you are obligated to pay tax on the amount received. In this piece, we’ll look into both these issues and others.
How much tax is levied on the sender?
Money transferred from abroad to India is not subject to taxation. There’s none.
This is because the revenue you earn in Canada has already been taxed.
India and 85 other nations, including Canada, have signed a Double Taxation Avoidance Agreement.
Suppose you have already paid tax on income generated outside of India. In that case, you will not have to pay tax on transferring that money back to India, according to the Double Taxation Avoidance Agreement between India and any foreign countries listed above.
When you transfer money to India using any foreign exchange or money transfer service, the only taxes you’ll have to pay are the service tax (a negligible amount) and transaction fees.
So, if you want to send money to your parents or close relatives in India for personal reasons, you should transfer the money to their Indian savings account. There will be no further tax due on that amount.
So, how much money can you transfer to India in a year?
In theory, there is no limit on how much money you can send back to India in a given year. All governments welcome foreign funds since they help boost the economy. India has not imposed any restrictions on obtaining donations from other countries.
However, the foreign country you visit may restrict how much money you can send abroad. These rules range from one country to the next.
It is tax-free if you send the money to your NRE/NRO account or the bank account of a close relative.
A close relative is defined as an individual’s:
- present or previous spouse
- father/ mother/guardian
- brother/ sister
- son/ daughter
- father-in-law/ mother-in-law/ brother-in-law/ sister-in-law/ son-in-law/ daughter-in-law
According to Canadian law.
For the receiver’s money sent overseas to India how much tax is levied?
If the sender is a close relative, there is no tax to pay.
According to RBI rules, remittance money received from close relatives living overseas is a tax-free gift.
Close relatives include:
- The individual’s spouse
- Individual’s brother or sister
- The individual’s spouse’s brother or sister
- a brother or sister of one of the individual’s parents
- Any descendent or descendant of the individual’s lineage
- Any descendant or lineal descendant of the individual’s spouse
Tax on sending money abroad from India for education
Any amount sent overseas to purchase foreign travel packages and any other foreign transfer above INR 10 lakhs would be subject to a tax-collected-at-source (TCS) unless the tax has previously been deducted at source (TDS). While overseas travel packages would be taxed at 5% regardless of the amount, other foreign remittances will be taxed only if the amount spent exceeds INR 10 lakhs.
Starting April 1, 2025, the annual TCS threshold for LRS remittances will be raised from ₹7 lakh to ₹10 lakh per financial year. Many Indian students take out loans to pursue studies overseas; the tax on education-related foreign remittances supported by loans will be just 0.5 % for amounts over INR 10 lakhs. Individuals can send a maximum of $250,000 abroad each year under the Reserve Bank of India’s liberalised remittances scheme.
To gain a better understanding of transactions in the Indian economy and to be able to match assesses’ spending patterns with their reported taxable income, the Union finance ministry has been expanding the scope of both tax deducted at source and tax collected at birth, as well as encouraging electronic payments.
