Inward remittance refers to the transfer of money to India from a foreign country
Every year, non-resident Indians worldwide send billions of rupees to India for a variety of reasons, from funding investments to supporting family back home. Inward remittance refers to the transfer of money to Indian from abroad. For example, when you receive money in your Indian bank account from a relative abroad, it is called inward remittance.
Let us illustrate with an example. Alok works abroad as an engineer. Every month, he sends a sizeable chunk of his salary back home to his elderly parents. Now, whenever he transfers money to their bank account, probably a savings account, he is making an outward remittance. For the parents who receive the money, it is an inward remittance.
The Reserve Bank of India (RBI) has laid down a few guidelines to regulate inward remittances:
The guidelines are periodically updated. It's best to visit the official RBI website or consult with your bank to know the latest inward remittance guidelines.
Let's take a look at how inward foreign inward remittances are helping families as well as the economy of India.
Foreign inward remittances help NRIs support a good lifestyle for their family in India, provide medical care, and fund their children's education.
India is one of the biggest recipients of foreign remittance. In 2019, NRIs sent $83 billion back home. Inward remittances are a great source of foreign exchange and also help spur consumption in India. This has a positive impact on the local economy.
The process to receive money online through a remittance is relatively straightforward. All you need to do is share certain details with the sender. The details include your full name, address, local bank account number, bank name and address, bank's SWIFT code, and purpose of remittance. Your bank may require additional details, so it's best to check with your bank what else they need. Once you have these details, ask the sender to initiate the remittance from their bank account.
You will receive a notification on your phone or by email when your inward remittance arrives.
Charges for inward remittances vary. The costs depend on factors such as the prevailing currency exchange rate, correspondent bank charges, type of transfer, the type of account, country from which the remittance is being made etc. However, your bank will inform you about the estimated charges before you complete your transaction.
Receiving inward remittances is fairly straightforward. You can receive money from abroad into any bank account in a hassle-free and simple manner.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.