Why does my bank keep asking for more documents to remit money?
Because the bank is the checkpoint for the exchange-control regime, and it cannot release a transfer until the purpose is declared and evidenced. The scheme permits remittances by resident individuals within an annual limit and only for stated purposes, so the bank needs to see which purpose applies, that you are eligible to use it, and that the tax side has been dealt with. It is not the bank being difficult; it carries the obligation. The way to shorten the process is to decide the purpose before you start, gather the documents that go with that purpose, and keep the story consistent across every form.
Am I resident for the remittance rules if I am non-resident for tax?
The two regimes define residence differently and for different purposes, so the answer can be yes to one and no to the other at the same time. Tax residence decides what India can tax. Exchange-control residence decides which accounts you may hold, what you may remit, and by which route. People run into this after a move, when their status changes for one regime and not the other. Establish your position under each separately, and expect a bank to apply its own regime's test whatever your tax return says.
Does the annual limit apply per person or per family?
The limit under the scheme attaches to the individual, so each eligible person has their own. That is why families funding a common purpose, such as education or a property purchase, often remit from several accounts. Doing so has consequences well beyond the transfer: the person who remitted is generally the person treated as owning the funds abroad, and that matters when the asset is later reported, sold or passed on. Decide whose money it is before deciding whose account it leaves from, rather than the other way round.
Can I remit money out of India after moving abroad?
The scheme is for resident individuals, so once you are treated as non-resident under the exchange-control regime a different route generally applies to moving your funds, with its own documentation. What tends to happen instead is that people carry on using the account and the route they always used, because nothing prompts them to change. The account itself usually has to be re-designated on a change of status, and doing that late creates a tidying exercise. The sequence is to settle the status question, put the accounts on the right footing, and only then move the money.
What happens if I remit for one purpose and use it for another?
The declared purpose is what the permission rests on, so using the funds for something else undermines the basis on which they left. Some purposes are permitted and some are restricted, and the declaration is the record of which one you claimed. If the plan changes after the money has gone, the sensible response is to document when and why it changed and to establish whether the new use is itself permitted, rather than leaving a declaration on file that no longer describes what happened. That paperwork gets read when something else brings the account into view.
Do I have to report the money once it is abroad?
Sending funds under the scheme deals with permission to move them. It does not deal with what happens afterwards. The account or asset you fund abroad may be reportable in India while you remain resident there, and again in the country it sits in, and each regime has its own definitions and its own forms. Treat the remittance as the first step rather than the last, and set the reporting up at the same time. Most of the correspondence that follows these files comes from the reporting, not from the transfer.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
Can an accountant in one country file my return in another?
Yes, where they are authorised to represent you with that tax authority and the filing is done electronically. What matters is not where the adviser sits but whether they can lawfully act for you and are competent in both systems — a return prepared with no knowledge of the other country is where the relief gets missed. We file on both sides, from offices in India, the USA, Canada and the UAE. See how we work.
