While planning to send money abroad from India, the charges are one among the most vital considerations for many. Unfortunately, most of the banks and money transfer companies are less transparent about the charges. But don’t worry! This guide is an ultimate disclosure of the common fees associated with outward remittances from India.
By the end of this blog, you shall learn how to make informed decisions and most importantly, discover the cheapest way to transfer money abroad from India.
Also Read: 8 Mistakes To Avoid When Transferring Money From India
Understanding the Fee Structure of International Transfers
Here is a breakdown of the charges typically applied by banks and money transfer companies.
1. Transfer Fees
Transfer fees are the flat commission levied for initiating and processing an outward remittance. It can vary among banks and money transfer companies depending on the transfer amount, currency, and the sender’s bank account type.
| Bank/Money Transfer Company | Applicable Transfer Fees | Factor Determining Fees |
| SBI Bank1 | ₹590 | Nil |
| HDFC Bank2 | ₹500 or ₹1000 | Transfer amount |
| Wise3 | ₹350 – ₹500 (fixed fee) + upto 1.16% (variable fee) | Currency Transfer amount |
| Western Union4 | ₹0 | Nil |
| ExTravelMoney5 | ₹300-500 (bank fee, no platform fee) | Transfer Purpose |
3. Currency Conversion Markup
The exchange rate you see on Google is not usually what you get when sending money abroad. This exchange rate, which is the midpoint between the buying and selling prices of two currencies at a specific time, is called the mid-market exchange rate. Banks and money transfer companies apply a profit percentage to the mid-market exchange rate called the currency conversion markup. Therefore, you will need to pay more if you want the exact amount to reach the beneficiary.
| Bank/Money Transfer Company | Applicable Markup |
| SBI Bank6 | 1 – 3% |
| HDFC Bank7 | 2 – 3.5% |
| Wise | Nil |
| Western Union8 | 1.9 – 2.2% |
| ExTravelMoney9 | 0.5 – 0.7% |
Pro Tip: Always check the mid-market or interbank rate before sending money abroad. By doing so, you can analyse whether the markup charged is reasonable. Check Today’s Interbank Rates
3. Intermediary Bank Charges
Intermediary bank charge or the NOSTRO fee is charged by the third-party bank or banks that stand as an intermediary between the sender and the beneficiary bank when they lack a direct relationship.
This fee is approximately USD 30 and is deducted from the transfer amount. Banks and money transfer companies may either add this amount as a buffer or notify the sender about the deduction in advance.
Pro Tip: A sender also has the option to choose who gets to pay the Intermediary bank charge. The three options are OUR, BEN, and SHA. Learn More: What are OUR, BEN, SHA Payment Instructions in Foreign Remittance?
4. Beneficiary Bank Charges
The beneficiary bank charge is collected by the beneficiary bank abroad as a service fee. The bank automatically deducts this fee from the credited transfer amount. Typically, beneficiary bank charges range around USD 30, but can vary depending upon the amount, bank, account type and country.
Pro Tip: The beneficiary has the option to connect with the bank to discuss the possibility of waiving the beneficiary fee. It’s worth trying, as this could save you some money!
5. GST (Goods and Services Tax)
Similar to other products and services in India, GST is applicable on outward remittances as well. GST is charged at 18% on service or transfer charges.
The government also imposes GST on the transfer amount, but it remains relatively low. The GST is calculated based on the transaction volume, which is divided into three slabs.
| Slabs | GST Payable | Minimum Tax to be Paid | Maximum Tax to be Paid |
| Slab 1 (Upto Rs. 1 lakh) | 0.18% of the total amount sent abroad | Rs. 45 | Rs. 180 |
| Slab 2 (Rs.1 lakh – Rs.10 lakhs) | Rs.180 + 0.09% of the amount above Rs. 1 lakh to Rs. 10 lakhs | Rs. 180 | Rs. 990 |
| Slab 3(Above Rs. 10 lakhs) | Rs. 990 + 0.018% of the amount above Rs. 10 lakhs | Rs. 990 | Rs. 10,800 |
6. TCS (Tax Collected at Source)
TCS is charged based on your purpose for the money transfer. 20% TCS is levied for payments above the threshold of Rs. 10 lakhs. However, the government offers concession on crucial purposes such as education and medical treatments. In all cases, payments below the set limit attract no TCS (except foreign tour packages).
| Type of Outward Remittance | Rate of TCS below the Threshold | Rate of TCS for Above the Threshold |
| Education Purposes (financed by education loan) | Not Applicable | Not Applicable |
| Education Purposes (financed by other sources) | Not Applicable | 5% of the amount above Rs. 10 lakhs |
| Medical Treatment Abroad | Not Applicable | 5% of the amount above Rs. 10 lakhs |
| Overseas Tour Package | 5% of the total amount | 20% of the total amount |
| All Other Purposes | Not Applicable | 20% of the amount above Rs. 10 lakhs |
Pro Tip: TCS paid can be claimed back while filing the Income Tax Return (ITR) as a refund or deduction in the ITR payable.
Learn More: How To Claim TCS Refund Online When Filing ITR?
Cheapest Way to Send Money Abroad from India
Now here is the answer to your million-dollar question, “How to save money on international money transfers”
The answer is to compare rates before choosing a provider.
Now, how can you do it in less time and effort? The best way is ExTravelMoney!
Being an online forex aggregator, we provide you the opportunity to compare rates from RBI-authorised foreign exchange houses and banks partnered on our website and choose the best option and save thousands of Rupees on your remittance.
How does Extravelmoney make international transfers smarter?
- The online marketplace model creates a competitive space where banks and exchange houses try to outbid each other in terms of rates and service quality. That means you get more options and better deals without the mental toil.
- You don’t pay us a rupee as platform fees. Moreover, we assure complete transparency in the taxes and applicable bank charges of your chosen forex partner.
- You need not open an account with our partnered banks or sign up with our money changers for your transaction. Just pick the best service provider and complete your transfer. It’s that simple.
- No chatbots, get assigned a personal forex expert who can guide and give you insights on the process and tax regulations.
Sending money abroad doesn’t have to be a mystery or a money pit. So, by understanding the various charges involved and using smart platforms like Extravelmoney, you can ensure your fund transfers are pocket-friendly. Ready to save on your next international transfer?
Also Read: 6 Tips to Save Money on International Transfers: Expert Advice
Article Sources:
- SBI Bank Charges ↩︎
- HDFC Charges ↩︎
- Wise Charges ↩︎
- Western Union Home Page ↩︎
- Extravelmoney Home Page ↩︎
- SBI Bank Exchange Rate Table ↩︎
- HDFC Bank Treasury Forex Card Rates ↩︎
- Western Union Currency Converter ↩︎
- ExTravelMoney Forex Rates ↩︎
Ann Mariya Job is the Associate Content Writer at ExTravelMoney.com. Holding a Bachelor’s in Journalism, she excels in creating deeply researched, engaging, and crisp content. Her work helps readers understand the complexities of foreign exchange, overseas money transfers, and international travel.