In this age of globalization, many Indians have settled in different countries mainly for job purpose and better lifestyle. Altogetherly, this has lead to more and more businesses dealing with counterparts in their home country. Online money transfer is now what everyone needs to do for remittance purpose. Despite the ease of money transfers, people still prefer to use bank for their remittances or business transactions even though the banks charge astronomical fees and exchange rate that are above market rate. The matter of fact is banks are not specialist in currency exchange and hence charge their customers more.
A person is considered to be a resident of India if he or she is in India for 182 days or more during the current year. Many people send money home to India, but a number of NRIs (Non-Resident Indians) have faced problems in maintaining a rupee account in India. Opening an NRE (Non-Resident External) account in India provides a good option for overcoming these problems. The Foreign Exchange Management Act (FEMA) does not specify any limits or restrictions on most remittances sent to India by NRIs, making it easy for them to send any amount of money to India.
So what is an NRE Account?
An NRE account is a savings account that can be opened by any NRI from any country. It is meant to send money to their home account. This account lets you transfer your earnings to India conveniently with complete security. Money transferred to a NRE account in any foreign currency is converted to INR and permits NRIs to hold and maintain foreign currency earnings in INR.
How do NRI’s benefit from Online money transfer to India?
If you are a NRI, sending online money to a NRE account may be financially advantageous to you for several reasons.
- It allows you to send as much amount as you want to India.
- It allows you to stay in complete control of your hard-earned income abroad.
- It allows you to transfer your funds freely to and from India.
- It provides a ‘multicity’ checkbook, which allows you to make payments with checks at multiple locations.
- It has a ‘mandate’ or Letter of Authority facility, so that you can authorize your relative or friend to operate your bank account on your behalf.
- It offers 24/7 account access through secure a Internet banking facility from anywhere at anytime.
- There are no restrictions for transferring the money from the NRE account back to your foreign account.
- It allows you to withdraw cash easily.
- You can hold your NRE savings account jointly with another NRI or Resident Indian.
- You can have a nominee for the NRE Savings Account.
- The Reserve Bank allows NRIs to transfer funds from a non-resident ordinary (NRO) account to a NRE account.
A NRE account is tax-free, including no income tax, no wealth tax and no gift tax in India for any amount of money transferred to your NRE account. There is also no tax on interest earned on a NRE account. In case you qualify as a resident in India, the interest earned on the NRE account will be taxable regardless of where it is earned. However, if you qualify as a non-resident, you will be subject to taxes only on income that is received in India.
By using an online money transfer service, one can send funds from any part of the world with a secured internet connection. One does not need to drop everything they plan to do and spend a day in a foreign bank. It is important to balance life while away from home country and should not let their money lost in between. Before choosing any online remittance service, make sure that they serve the country where the money is to be transferred.
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