Sachin, an Indian software engineer living in San Francisco, balances his demanding job at a tech startup with family obligations. Despite the challenges of expatriate life and the distance separating him from his family in India, he remains deeply connected to his loved ones. His father, mother, and younger siblings rely on his financial support to meet their daily and urgent needs.
For Sachin, money transfers are not just financial transactions; they represent vital links that connect him to his family, providing essential support across the oceans. Every dollar he earns is carefully allocated to cover medical expenses, the education of his siblings, or the everyday expenses of his family.
Remittances are crucial for Sachin’s family, and he is not alone in this situation. Today, millions of Indians living abroad, whether in the United States, the United Kingdom, or elsewhere, face similar challenges daily.
This article is designed to provide a comprehensive guide, not only to understand the legal and fiscal aspects of these transactions but also to choose the transfer method best suited to your specific needs, whether for education, health, or other necessities. We will explore the fastest, least expensive, and safest options for sending or receiving money in India.
What are the different ways to send and receive money in India?
India has made significant progress in terms of financial inclusion with the introduction of the Aadhaar system and the Pradhan Mantri Jan Dhan Yojana program, which have greatly increased the number of bank accounts opened.
India Stack is an ambitious set of APIs (Application Programming Interfaces) that enable the digitization and simplification of processes involving documents, signatures, and payments throughout India.
Today, nearly 90% of the Indian population now possesses an Aadhaar digital identity, with half of these individuals having linked their ID to their bank account.
Despite these advances, nearly half of the bank accounts in India remain inactive, as financial inclusion is still in development.
Today, banks are not easily accessible, and it must also be considered that a large part of the population is illiterate. Therefore, some account creation processes can be quite complicated for some Indians.
Most people own one or two accounts in different banking institutions. They manage one account, and the others are neglected.
Not to mention that bank transactions can sometimes take more than a day.
As a result, many accounts do not receive regular deposits, which poses a challenge in terms of engagement and effective use of financial services.
1 – Traditional Banks
Traditional banking services are among the reliable and secure options for sending and receiving money in India.
Advantages:
- Security and Trust: Banks are regulated by financial oversight bodies, offering a high level of security and protection for your funds.
- Additional Services: Beyond money transfers, banks offer a range of financial services, including investment advice, loans, and credit facilities.
- Direct International Transfers: You can send money directly from your bank account to an account in India, simplifying the process without the need for intermediaries.
Disadvantages:
- High Costs: Transfer fees and exchange rates can be particularly high. Additional costs can accumulate, especially for frequent or large transfers.
- Slower Process: Processing international transfers can take several business days, which is not ideal for emergency needs such as healthcare.
- Complexity and Documentary Requirements: Sending funds abroad through banks can require extensive documentation and administrative formalities, making the process sometimes cumbersome.
- Need for a Bank Account: This requirement can be a major barrier, especially in India where, although a majority of the population has access to traditional banking services, many accounts remain unused. This financial barrier limits access to money transfers for those who may need them most.
2 – Online Services and Applications
Online services such as Wise (formerly TransferWise), WorldRemit, PayPal, Venmo, and Cash App have revolutionized how we send and receive money globally.
They offer a convenient and often more economical alternative to traditional money transfer methods, suited to our digital era.
Later in this article, you will find our ranking of the fastest and least expensive ways to send or receive money in India.
Advantages:
- Speed and Ease of Use: These platforms enable fast, often instant money transfers, with a simple online operation or via a mobile app. Their intuitive user interface makes the process accessible to everyone.
- Cost-Effective: The fees applied by these services are generally lower than those of traditional banks, especially for international transactions. They also offer competitive exchange rates, which can result in significant savings.
Disadvantages:
- Necessity of an Account on the Same Platform: To receive money via these services, the recipient often needs to have an account. This can be a barrier for people who are not accustomed to using such services or who do not have access to technological means in India. Sometimes, withdrawal options are limited to the banks or services that your relatives can access.
- Lack of Personalization for Specific Needs: These services are not designed specifically for needs such as healthcare access. They do not provide the same assurance that every penny transferred will be used for medical purposes or to improve the well-being of loved ones.
- Lack of Transparency and Tracking: Although these platforms offer some transparency regarding fees and the transfer process, they do not provide a detailed mechanism to track how the funds are specifically used once received. This is crucial for donors who want to ensure that their financial support is directly allocated to specific needs, such as healthcare for their loved ones.
- Geographical Limitation: Often, these apps are designed to operate primarily in a specific country or region, which poses a problem for immigrants wishing to financially support their loved ones in India.
- Data Security: Although these apps take measures to protect users’ financial information, concerns about the security of personal data remain.
3 – The Growing Digital Rupee and UPI
The adoption of advanced payment technologies in India has revolutionized how money transfers are conducted.
Two major innovations, the Unified Payments Interface (UPI) and the digital rupee, have played key roles in this transformation.
UPI is a platform developed by the National Payments Corporation of India that allows instant money transfers between parties via smartphones, using only identifiers like phone numbers or email addresses.
This method has not only simplified daily payments for millions of users but has also reduced the costs associated with traditional financial transactions. In 2023, UPI processed 12 billion transactions, positioning India as a global leader in real-time payments.
The impact of UPI on remittances is significant. For Indian expatriates, using UPI can facilitate the transfer of funds to their Indian bank accounts quickly and economically, offering an alternative to more costly channels like international bank transfers or traditional money transfer services.
The introduction of the digital rupee by the Reserve Bank of India (RBI) represents a major step towards the adoption of central bank digital currencies (CBDCs).
Unlike cryptocurrencies, which are decentralized and subject to significant fluctuations, the digital rupee is fully regulated by the RBI, ensuring stability and security.
This new type of currency aims to complement traditional fiat money and provide a safer and more efficient digital payment method for interbank transactions and remittances.
The use of the digital rupee could revolutionize remittances by further reducing transaction fees and speeding up currency conversion processes, which is particularly advantageous for international money transfers. By simplifying cross-border transactions, the digital rupee could offer a viable option for international fund transfers, reducing associated costs and delays.
3.1 – The Online Health Credit Solution
If you wish to support your loved ones in India, especially in healthcare, health credits offer a solution that combines speed, security, and positive impact.
KimboCare was inspired by the experiences of two African immigrants who faced challenges in supporting the health of their loved ones back in Africa while navigating their own lives in the United States and Europe, a story similar to that of Sachin mentioned in our introduction.
This story is not unique, but our response to this challenge certainly is.
KimboCare was created to transform how we care for our families from a distance, whether in India or other developing countries.
Now, you can purchase digital health credits so that your loved ones can access preventive and curative healthcare services without needing a bank account or a digital currency platform.
This process is simple, direct, and can be done from anywhere, at any time. These credits will be immediately usable by patients who will be welcomed at medical facilities consistently verified and monitored by KimboCare.
Rather than just sending money, often without a guarantee that it will be used for necessary healthcare or without being able to ensure the quality of the care received, health credits offer a transparent and secure solution.
You get real-time tracking of the medical services purchased with the health credits, ensuring that every penny truly contributes to the health and well-being of the recipient.
The commitment lies in empowering vulnerable populations, particularly women and children, to access quality healthcare, thus contributing to a longer and healthier life.
The true utility of health credits lies in the protection of your data with advanced encryption protocols, giving you additional peace of mind while contributing to the health of your loved ones.
The fastest ways to send or receive money in India
To send or receive money quickly in India, several options are available, each with its own specifics, benefits, and limitations. It is crucial to choose the method that best fits your needs, taking into account speed, costs, and specific requirements.
Health Credits
By purchasing health credits, you can ensure that your financial support is used directly for quality healthcare services.
For urgent healthcare needs, prioritize services that offer instant or same-day transfers. Some platforms, like KimboCare, directly inform the patient via an SMS or a phone call.
Not only does this allow for an efficient and quick transfer of funds, but it also ensures that your money contributes to a vital cause: the health of your loved ones.
Purchasing health credits frees you from the uncertainties and delays often associated with traditional money transfers.
When you buy health credits for a loved one in India, the recipient can access necessary care without waiting, thanks to a network of reliable and verified medical partners.
Moreover, you benefit from complete transparency and real-time traceability of the medical services delivered, which is not always the case with other money transfer methods.
Online Services and Mobile Apps
Online services and mobile apps are often the fastest for money transfers.
Platforms like PayPal, Western Union, World Remit, and TransferWise (now Wise) enable nearly instant transfers.
However, it is important to note that these speeds can vary depending on the amount sent and the necessary security checks.
Some platforms limit the amount you can send over a given period without additional verification, while others may require detailed information about the recipient for compliance reasons.
International Banks
International bank transfers can also be fast, especially if both parties use the same bank or banks with cooperative agreements.
Nevertheless, interbank transfers may be subject to delays due to stricter verification processes and the need to go through clearing systems.
Amount limits and specific requirements vary significantly from one bank to another. This is particularly important in India, where most households face restrictions on their withdrawals.
The least expensive ways to send or receive money in India
Sending or receiving money from a loved one involves adopting a strategic approach to minimize costs while ensuring the security and efficiency of transactions.
Online services and mobile apps often offer more favorable rates than traditional banks, thanks to their reduced cost structures.
Although PayPal is better known for online payments, Xoom, a service of PayPal, is optimized for international transfers, offering reasonable fees and competitive exchange rates.
The biggest issue is getting a good exchange rate.
Even if you send the same amount of money each time, the actual amount your family receives can vary.
Currently, the exchange rate between dollars and rupees is about 83 rupees.
Before choosing a service, compare transaction fees, the exchange rates applied, and look for reviews to ensure reliability and security.
Opting for platforms that offer a transparent exchange rate as close as possible to the market rate without hidden fees can greatly reduce the costs of transferring money to India.
Is It Possible to Transfer Money with Zero Fees?
Platforms like TransferWise (now Wise) and Remitly are known for their competitive costs and transparency.
Although the offer of fee-free money transfers may seem attractive, it can often be misleading.
Money transfer companies need to generate revenue to operate, and if they do not impose explicit transfer fees, they may recover these costs in other ways.
This can include applying less favorable exchange rates, meaning your money loses value en route, or introducing ancillary fees once you engage in the transfer process.
Therefore, it is important to be vigilant about hidden fees, which can appear in the form of additional service charges or indirect costs.
Carefully reading the terms of service can save you from unpleasant surprises.
When the goal of your money transfer is specifically related to supporting the healthcare needs of your loved ones in India, purchasing health credits emerges as an innovative solution offering affordable costs.
This guarantees that your loved ones obtain the necessary best healthcare while avoiding unnecessary fees or fluctuations in the exchange rate.
You know exactly which care has been provided, when, and at what cost, ensuring that your contribution has the desired impact.
Moreover, no money transfer is necessary, thus minimizing the risks of hidden fees.
Transferring funds to India based on various needs
Sending money to India goes beyond a mere transaction; it is an expression of support, love, and investment in the future of your loved ones.
Whether it’s promoting access to education or ensuring family health, every rupee sent carries the potential for change and empowerment, enabling your loved ones to pursue their dreams and build a better future for themselves and their communities.
Education
Investing in education is a priority for many families.
With illiteracy rates affecting a large part of the population, investing in education is a top priority for many Indian families. Sending funds to cover tuition, books, uniforms, and other school supplies is vital.
These transfers can be made via banks or online transfer platforms, which often offer options to deposit funds directly into the bank accounts of educational institutions, thus reducing intermediaries and ensuring that the funds reach their intended destination.
Meanwhile, the employment situation in India can be precarious, particularly for youth who have not had access to schooling that enables them to secure a place in the workforce.
Take, for example, Raj, who, like many Indians, faced a competitive job market and limited opportunities that matched his skills and ambitions.
After several unsuccessful attempts to secure stable employment, he became dependent on fund transfers from his elder brother, Amit, who works as a software developer in San Francisco.
Aware of the challenges faced by Raj and their family in India, Amit makes sure to regularly send money to support Raj’s efforts in pursuing his professional aspirations.
Each month, Amit transfers about $300—a sum that represents much more in terms of local purchasing power in India than it is worth in the United States.
These funds have allowed Raj not only to meet his basic needs but also to enroll in online certification courses to enhance his academic abilities.
Thanks to this financial support, Raj has recently started training to learn new skills, which allows him to gain experience while looking for stable employment, without the immediate pressure of finding a means of subsistence.
These stories highlight the crucial importance of fund transfers not only for sustaining education but also as a lever for improving employment opportunities in India, enabling individuals and their families to aim for a better quality of life and a more promising future.
Health
When it comes to caring for those who are far away, a major concern is often the certainty that the help sent actually reaches its intended purpose, especially in terms of health.
This concern is well-founded, as finding a competent and reliable healthcare professional for loved ones in India can turn a simple procedure into a real challenge, especially in emergencies.
The weeks spent searching for an adequate doctor, the stress of having to navigate a complex health system remotely without any guarantee of quality or effectiveness, and the fear of additional “unofficial” fees are significant barriers to equitable access to healthcare.
Aadhya, a waitress working in London, knows this all too well. When her father in Delhi was diagnosed with a heart condition requiring regular monitoring and expensive treatments, she faced the complexity and opacity of the Indian healthcare system.
Despite the large number of hospitals and clinics in India, disparities in the quality of care, inconsistent standards, and variability in medical skills complicate matters. Patients, like Aadhya’s father, often face a lack of information and unexpected additional costs.
Aadhya was constantly worried about her father’s health and felt powerless thousands of miles away.
However, her situation changed when a colleague recommended KimboCare. This platform allows expatriates like her to pay directly for quality healthcare for their loved ones in India, with complete transparency and tracking.
Intrigued, Aadhya quickly adopted KimboCare, which allowed her to directly fund the necessary medical examinations for her father.
The results were clearly communicated and a detailed treatment plan was established, significantly improving the management of her father’s care. Regular visits with the doctors were organized, reassuring Aadhya about the quality of the care received.
Thanks to KimboCare, instead of simply sending money, Aadhya could purchase health credits that were used exclusively for medical treatments through reliable and verified local medical partners in India.
KimboCare is not just a platform; it offers peace of mind, knowing that your financial support translates directly into quality healthcare.
This method not only ensures that your funds are used as intended but also eliminates the stress and uncertainty associated with managing healthcare from a distance.
Moreover, KimboCare steps in as needed to coordinate communications with the medical staff to ensure the best possible experience for your loved ones.
Thus, you can easily identify reliable medical facilities and, importantly, follow the care and receive feedback directly from your loved ones themselves.
Nutrition
Ensuring that our loved ones have access to adequate and nutritious food is a fundamental priority, especially in regions where the quality and variety of foods may be impacted by financial constraints.
Sending money to cover food needs not only supports the physical well-being of our families but also nurtures their happiness and daily security.
Indian cuisine, known for its spices and diversity, reflects the rich cultural tapestry of the country. Essential ingredients such as Basmati rice, lentils, a variety of spices (turmeric, cumin, cardamom), and fresh herbs are used to prepare dishes that are more than just meals; they also nourish the spirit of the community.
Take, for example, Biryani, a staple dish in Indian cuisine. This rich rice dish is enhanced with meat or vegetables, marinated in spices, and cooked with fragrant rice, reflecting the blend of historical influences and regional flavors that characterize India.
For every Indian, whether in the country or abroad, Biryani is more than a meal: it is a symbol of family ties and deep cultural roots.
Curries and dals, such as Dal Tadka or Goan Curry, also play a central role in daily nutrition. These dishes, often served with naan or rice, provide comfort to those away from home, reminding them of the flavors of their childhood.
These foods are more than just nourishment; they are a reminder of home for expatriates and a concrete way to keep traditions alive, even thousands of miles away.
For Indians living abroad, sending money home often goes beyond mere financial aid; it is also a means to ensure that their families can procure these essential ingredients and continue to prepare these traditional dishes.
Each money transfer is thus a way to perpetuate traditions, support local communities, and maintain a vital link with their cultural heritage. These acts of sending money support not only immediate needs but also strengthen social and cultural ties, essential for the cohesion and well-being of families back home.
Our Safety Tips for Transferring Money to India
In an ideal world, sending and receiving money across borders would be as simple and safe as making a phone call.
However, the reality of international money transfers can sometimes be complex, with risks of fraud and scams preying on the most vulnerable.
- Verify and Validate Your Fund Destination
Ensure that the money you send reaches the person you intend to help. This might seem obvious, but in urgent situations, mistakes can happen.
Double-check the recipient’s contact details and information before proceeding with any transfer.
We advise opting for well-established and reputable money transfer services that offer complete transparency about the path of your funds throughout the process.
- Beware of Too-Good-To-Be-True Offers
Scammers often use the promise of extremely favorable exchange rates or zero transaction fees to lure their victims.
If an offer seems too good to be true, it probably is.
Similarly, a common scam tactic is to create a sense of urgency, like a fake health issue of a loved one, to push you to send money quickly without verification.
- Never Share Your Personal Information
Be vigilant with your personal and financial data. Fraudsters may try to obtain them via phone, email, or social networks.
A legitimate company will never ask you to provide sensitive information through these channels.
It is best to opt for a solution where your data is protected by advanced encryption protocols, and you have access control.
- Ensure You Track Your Funds
Having a record of every money transfer can prove invaluable in case of issues.
This documentation allows you to trace and challenge any suspicious transactions.
After sending money, check with your recipient to confirm the receipt of the funds.
This simple step can help you quickly detect potential fraud.
The best help you can get for sending or receiving money in India is from an agency that ensures every penny is invested in specific needs (such as healthcare costs), with zero risk of diversion by unreliable intermediaries.
An Overview of Money Transfer Laws in India
India, with its constantly evolving economic and monetary dynamics, plays a crucial role in the global remittance market. In 2023, the country received a record $125 billion in remittances, the highest figure ever recorded for a single year.
Today, India is at the top of the list of recipient countries for money transfers worldwide, followed by Mexico and China.
These money transfers primarily come from the United States, the United Arab Emirates, and the United Kingdom, with significant contributions from countries like Singapore and Saudi Arabia.
The laws and regulations governing money transfers in India are mainly framed by the Reserve Bank of India (RBI) through various directives, including the Foreign Exchange Management Act (FEMA).
These regulations are designed to facilitate secure money transfers while preventing illegal activities such as money laundering.
Introduced in 2004, the Liberalized Remittance Scheme allows Indian residents to transfer up to $250,000 per year for various transactions authorized by the RBI, such as educational expenses, travel, medical care, or investments abroad.
These transfers must be carried out through banks declared as “Authorized Dealers” by the RBI, ensuring that the funds are transferred legally and documented.
Moreover, the RBI actively monitors the foreign exchange market to prevent excessive volatility and ensures a balance in the flow of foreign currencies. This includes interventions in the foreign exchange market to stabilize the Indian rupee when necessary.
The collaboration between government agencies, financial institutions, and innovative payment technologies like UPI continues to strengthen India’s position as a global leader in remittance management.
Taxation for Sending or Receiving Money in India
In India, taxation on remittances is structured to encourage the flow of foreign currencies while maintaining a robust regulatory framework to monitor and secure these transfers.
For incoming remittances, there is no general cap on the amounts that can be sent to India for personal transactions, although some restrictions may apply to business transfers.
Remittances through the Rupee Drawing Arrangement (RDA) and the Money Transfer Service Scheme (MTSS) are the two main authorized methods, with specific limits for MTSS at $2,500 per transfer and a maximum of 30 transfers per year for the same beneficiary.
Transfers received as gifts from family members are not taxable in India, as long as the amount does not exceed 50,000 INR (about 600 USD) from a non-relative in the fiscal year.
This measure aims to support Indian citizens who are financially dependent on the global diaspora. This means that funds sent by expatriates to support their family in India arrive without any tax deduction, allowing for maximum assistance.
However, although remittances received are not taxed, certain reporting requirements may apply if the amounts are particularly high.
These rules are in place to prevent money laundering and other forms of financial fraud.
Banks and other financial institutions facilitating these transactions must ensure that all operations comply with “Know Your Customer” (KYC) standards and other anti-money laundering regulations.
At KimboCare, we emphasize the importance of being well-informed about these aspects, as it not only helps ensure hassle-free money transfers but also supports our mission to provide equitable and affordable access to services, such as healthcare, for those in need in India.
FAQ
How can I send money to India in the safest way possible?
To ensure the security of your money transfer to India, choose reputable services with robust security protocols. Always check user reviews and ensure the service is regulated by competent financial authorities.
If you are sending money to cover healthcare costs, opt for recognized services with strong security protocols. Our platform ensures that each financial partner adheres to high security standards, ensuring your funds reach your loved ones safely.
Are money transfers to India taxed?
In India, the taxation on remittances is structured to encourage the flow of foreign currencies while maintaining a robust regulatory framework to monitor and secure these transfers.
Generally, remittances received in India by individuals from foreign sources are not taxable for the recipient.
How long does a money transfer to India take?
The transfer time can vary depending on the service used. Electronic transfers can be instant or take a few hours, while traditional methods like bank transfers can take several business days.
For urgent healthcare needs, prioritize services offering instant or same-day transfers. Some platforms like KimboCare directly inform the patient via an SMS or a call.
What are the typical fees associated with sending money to India?
Fees vary widely depending on the service chosen, the amount sent, and the payment method. Some services charge a percentage of the transferred amount, while others apply fixed fees. Look for options offering complete transparency on fees to avoid surprises.
Are there any amount limits for sending money to India?
Yes, most money transfer services impose limits, which can vary depending on the transfer method chosen and the regulations of the service. Note that your recipients may also face bank withdrawal limits locally.
It is essential to check these limits before making a transfer, especially if you plan to send large sums for needs such as covering medical expenses.
How can I ensure I get the best exchange rate when sending money to India?
Compare exchange rates offered by different services before making your transfer. Some services allow you to lock in a favorable exchange rate in advance or offer more competitive exchange rates for larger amounts. Be aware of hidden fees that can affect the final amount received!
How can my loved ones in India receive the money?
Recipients in India can receive money through direct deposits into their bank accounts, cash withdrawals at local service points, or even, for some services, home delivery. Ensure you choose a receipt method that best suits your recipient in terms of convenience and safety.
Regarding health credits, each credit purchased can then be offered to your loved ones for access to quality care in accredited medical facilities.