Studying abroad is one of the best experiences in life. Sending their wards for quality higher education abroad is a cherishable thought for many parents in India. However, finances is one of the main concern for students and parents aiming for higher education overseas.
Planning and budgeting to send their kids abroad for higher education is a major task. Foreign payments for tuition, boarding and lodging as well as other overheads are vital to a seamless experience while studying abroad.
As per the latest reports by the Reserve Bank of India (RBI), foreign remittances for education forms a huge part of the money sent abroad. According to reports from the HSBC, 88% Indian parents want to send their children abroad for higher education.
Keeping all these facts in mind, we are providing with details on legal and regulatory aspects of foreign remittances for education.
Sending money overseas/ how to transfer money
With the advent of technology, currency exchange has become more easy. You can simply wire transfer or send a demand draft in just a few minutes.
Some of the stipulations that must be followed are:
- Remittances to a foreign country must be made through prescribed methods like NEFT and RTGS
- Cheques are accepted but are subject to clearance
- Payments must be made directly to the partnering back of the fintech company that you are using through your savings account only
- Bank's account details are typically provided through an automatic notification upon your reconfirmation of the transaction
Documents required for transferring money
Check your transactions eligibility along with all the required documents. Total amount of remittances in a financial year should not exceed $250,000 as far as education goes.
Documents required are:
- Valid passport
- Student visa
- University offer letter
- PAN card
You need to visit the bank branch with original copies of these documents.
How to deal with currency fluctuations?
- Advance booking of the rate at which you will be sending over the money is allowed. This will protect your money from exchange rate fluctuations
- Booking the currency exchange rates is critical to make sure that you don't end up blowing your budget
- Exchange rate can be frozen with banks until the third working day, after which it will lapse
- Freezing of currency rates requires an adjustable/refundable advance of only 1% or 2% of the amount you are sending to avoid cancellations/adjustment loss due to cancellations
- You can freeze rate only when you pay by cash. Payments by cheques, however, are eligible for open rates
Other important points to be noted
- The bank will need a local residential proof such as landline bill or an electricity bill
- In case of international wire transfers, foreign international banks could levy transaction charges These charges are normally deducted from the transaction amount
- You can always choose to pay the transaction charges upfront in Indian currency
These aspects of foreign remittances will help you plan better and hassle free international transactions. Being aware of these basics is necessary for an easier experience at overseas remittance.