This article discusses the best options for NRIs transferring large amounts to India along with the tax and compliance rules.

📚 Table of Contents

☰

• How can large amounts be transferred to India safely, at the best rates, and with the lowest tax?
• Which accounts are suitable for this transfer to India?
  • Non-Resident External (NRE) Account
  • Non-Resident Ordinary (NRO) Account
  • Foreign Currency Non-Resident (FCNR) Account
  • Resident Foreign Currency (RFC)
• Will an NRI get a tax notice in India after making large transfers from abroad?
• What should be done in your home country after you have made this transfer?

How can large amounts be transferred to India safely, at the best rates, and with the lowest tax?

In this article, we will consider large (>$100,000 or equivalent) one-time money transfers from abroad to India and focus on:

• Getting the best exchange rates
• Via completely legal RBI/FEMA-approved channels
• Ensuring all tax-related paperwork is in place

However, given how foreign exchange markets and associated regulations work, 100% compliance with legal and regulatory requirements may not always give the best exchange rates.

We will discuss the following mechanisms for transfer: services like Wise/Remitly, bank-to-bank wire transfer and FX Brokers and evaluate them on options like:

• Regulatory Limits: non-bank providers may have daily/monthly transaction limits, while banks and FX Brokers do not
• Compliance around KYC/AML/FEMA: Bank-to-bank transfers are most robust in terms of regulatory and tax rules
• Fee Structures: Fees vary based on the volume and value of the transactions and can be a mix of a flat transfer fee and a spread
• Transfer Speed and Guarantees: Dispute resolution and customer service are the key factors when dealing with a large transfer

Service Type	Transfer Limit	FX Spread	Compliance Readiness	Suitability for >$100K
Wise	~$75K (region-dependent)	~0.4%	Medium	❌ (unless split)
Remitly	~$30K/month	~0.5-1.5%	Low-Medium	❌
Western Union	~$10K typical	2%+	Low	❌
Bank Wire	Unlimited	0.3-1.5%	High	✅
FX Brokers	High	0.2-0.6%	High	✅✅

Recommendation: Use a home-country bank with a SWIFT wire transfer to an NRE account in India. Negotiate the FX rate with the bank in India first.

Some banks like HSBC, which have branches in India as well as abroad, support immediate transfers if you already have accounts with them in both countries. If you plan to send this amount back anytime in the future, using a bank creates a proper paper trail.

Which accounts are suitable for this transfer to India?

Having Resident Indian accounts in India is a FEMA violation for an NRI.

Which is the best type of account for receiving large sums from abroad?

An NRE (Non-Resident External) account is ideal for receiving foreign funds in India. It allows NRIs to repatriate money without restrictions and offers tax-free interest income, making it a preferred choice for large remittances.

If the funds are to be kept in India and there is minimal chance of repatriation, then even an NRO account is used.

Here is a summary of the three types of accounts and their usages in India:

Feature	NRE Account	NRO Account	RFC Account
Funding Source	Foreign income only	Foreign + Indian income	Transfer of foreign income/assets post-return
Currency Type	INR	INR	Foreign currency (USD, GBP, EUR, etc.)
Repatriation	Freely repatriable	Limited to USD 1M/year with forms 15CA/CB	Freely repatriable
Tax on Interest (NRI)	Exempt	Taxable @30% + cess	Not applicable (not allowed as NRI)
Tax on Interest (RNOR)	Exempt	Taxable @30%	Exempt
Tax on Interest (Resident)	Taxable	Taxable	Taxable
Best Use Case	Holding foreign funds tax-free	Handling Indian income (rent, dividends etc.)	Holding foreign funds post-return, repatriation flexibility
Use While RNOR?	Retain	Avoid for foreign transfers	Transfer foreign currency here
Ease of Remitting	Very High	Moderate (capped at $10mn w/ Forms 15CA/CB)	Very High
Account Validity	NRI/RNOR only	NRI/RNOR/Resident	RNOR/Resident

Transferring to an NRO account can be a good option for NRIs returning to India since the NRO account becomes a simple resident Indian account once the NRI status changes back to RNOR/ROR.

Find out more about NRO and NRE accounts here:

Transferring to a resident Indian account in your name is a FEMA violation.

Will an NRI get a tax notice in India after making large transfers from abroad?

Section 148 notices are about income that has escaped assessment

This notice, which is generally preceded by a Section 148A notification, can become a big problem if not dealt with immediately.

That being said, just because you made one or more large transfers to India, does not mean you will automatically get Section 148 proceedings initiated. It is always good to maintain the following documentation in case they are ever needed:

• the source of funds coming into India: income tax and salary statements (say Form 1040 and W-2 for NRIs in the US) will suffice since they capture details on income and tax paid along with investment account statements (say you sold stocks)
• bank account statements from the foreign account showing debit of this amount along with official confirmation from the bank regarding the transfer
• NRI status proofs via passport with Indian entry/exit stamps along with any self-declaration required by banks for the transfer
• Incoming bank statement with transaction details captured with NRE/NRO status marked clearly
• Bank communication capturing the correct purpose code for the incoming remittance (e.g P1301: Inward remittance from Indian nonresidents towards family maintenance and savings)
• Tax Residency Certificate (TRC) from the foreign country in case there are questions on the source of funds as well as DTAA relief
• Ask the Indian bank to issue a Foreign Inward Remittance Certificate (FIRC), or AD Code-tagged credit advice letters that capture the remittance details like sender information, purpose code, transaction ID like UTR etc. This is an optional step for personal remittances but builds an airtight case for having the right documentation
• File income tax return (ITR) in India in every financial year, by 31st July, when you make such large transfers

If you are not using a bank for your transfer, ensure that you are collecting the necessary documents from them.

In summary,

Issue	Risk	Documentation That Protects You
Income Tax Department deems it taxable	Medium	FIRC + Source of Funds + NRE receipt
FEMA violation (e.g., using NRE/NRO wrongly)	Medium-High	Bank correspondence + RBI purpose code
Black Money Act scrutiny (if not declared abroad)	High	TRC + Tax return from foreign jurisdiction

These documents should be kept at least for 6 years in case of any tax notice and at least for 8-10 years for FEMA compliance.

What should be done in your home country after you have made this transfer?

You should also keep in mind that under FATCA/CRS, global assets are reportable. For example, if you transfer $100,000 from the US to India, you now have $100,000 in Indian assets that should be captured in your FBAR and trigger additional compliances like Forms 8938 and 8621. Other countries have similar regulations.

Country	Regulation(s)	Reporting Threshold	Forms/Declarations Required	Trigger Events
United States	FATCA, FBAR (FinCEN), PFIC	$10,000 (FBAR), $50,000+ (FATCA/Form 8938)	FBAR (FinCEN 114), Form 8938, Form 8621 (PFIC)	Holding foreign accounts/assets > threshold
United Kingdom	CRS	£50,000+ (varies)	Self-assessment with foreign income declaration	Interest/dividends from Indian accounts/investments
Canada	CRS	CAD 100,000+	T1135 Foreign Income Verification Statement	Holding specified foreign property
Australia	CRS, ATO Foreign Income Reporting	AUD 50,000+ (aggregate)	Foreign income section in tax return	Bank accounts, property, or investments abroad
Germany	CRS	No official threshold; all offshore assets	Declaration during annual tax filing	Any foreign income or asset ownership
Singapore	CRS	All foreign income taxable unless specifically exempt	Must declare global income in tax returns	Transfer or interest from Indian accounts
UAE	CRS	No personal income tax; banks report under CRS	No self-reporting, but banks share with foreign governments	Passive income from India (e.g., interest/dividends)
France	CRS	No official threshold	Foreign bank account declaration in annual filing	Holding Indian accounts or property
Switzerland	CRS	Thresholds set by banks	Automatic bank reporting to tax authorities	Transfers to/from India through Swiss accounts
New Zealand	CRS	NZD 50,000+ (aggregate)	Declare foreign income in IR3 or IR3NR	Bank interest, shares or real estate abroad

Note: CRS countries automatically exchange information on financial accounts with each other. If you’re a tax resident in one CRS country and hold Indian bank/investment accounts, Indian institutions will report this to your home country’s tax authority.