Lowest Forex Markup. Apply Now!!

Bank charges for inward remittance in india

There are a number of charges that come with forex remittances. Not only are you paying tax on the transaction but you are also paying the bank hefty fees for helping you make that payment. 

In fact, if we take the example of Bank charges for inward remittance in India, not only are the banks making profits on high mark up fees, but also adding commission fees as hidden charges. 

In such a case should you really be looking for “Bank charges for inward remittance in India” or should you be looking for alternatives that provide inward remittance services at half the cost? 

In this blog post , we break down the entire process of how much banks charge for inward remittance and what are the cheaper alternatives to help you conduct your business inward remittance smoothly. 

Let’s dive in! 

How much is the remittance fee?

When a business receives money from abroad into India, the fees can vary depending on the method and financial institutions involved. Here’s a simplified breakdown of the typical costs:

Traditional Banks

  1. Sending Bank Fees:
    • The bank sending the money might charge a flat fee, usually between $25 to $50.
  2. Receiving Bank Fees:
    • Indian banks often charge a fee for receiving money, ranging from ₹200 to ₹1,000 (about $2.50 to $12.50).
  3. Intermediary Bank Fees:
    • If the transfer goes through intermediary banks, they may also charge fees, typically between $10 to $30 per transaction.

Online Money Transfer Services

  1. Wise (formerly TransferWise):
    • Wise charges a small percentage of the amount sent plus a fixed fee. For example, sending $1,000 to India might cost around $8.50.
  2. PayPal:
    • For business transfers, PayPal charges a cross-border fee and a currency conversion fee. This might be around 4.4% of the amount plus a small fixed fee.

Specialized Business Remittance Services

  1. Western Union Business Solutions:
    • Fees vary, but they might charge a flat fee (e.g., $5 to $20) plus an exchange rate margin.
  2. MoneyGram:
    • Fees depend on the amount sent and the service chosen, ranging from $5 to $50, with additional costs included in the exchange rate.

Important Points for Businesses

  • Exchange Rate Margins:
    • Besides fees, the exchange rate offered can affect the total cost. Banks and transfer services often add a 1-3% margin on the exchange rate.
  • Transfer Speed:
    • Faster transfers (same-day or next-day) usually have higher fees compared to standard transfer times (3-5 business days).
  • Volume Discounts:
    • Some services offer lower fees for larger amounts or frequent transactions.

Example Cost Breakdown

  • Sending $10,000 from the USA to India:
    • Traditional Bank:
      • Sending bank fee: $30
      • Receiving bank fee: ₹500 (about $6.25)
      • Intermediary bank fee: $20
      • Exchange rate margin: 2%
      • Total Cost: $56.25 in fees + $200 for exchange rate margin
    • Wise:
      • Transfer fee: $50
      • No receiving bank fee
      • Exchange rate margin: 0.5%
      • Total Cost: $50 in fees + $50 for exchange rate margin
    • PayPal:
      • Transfer fee: 4.4% of $10,000 + fixed fee: $440 + $2.50
      • Exchange rate margin: 2.5%
      • Total Cost: $442.50 in fees + $250 for exchange rate margin

What is the inward remittance tax in India?

In India, inward remittances are typically not subject to direct taxes upon receipt. However, there are various considerations to be aware of:

Important Points About Inward Remittance Tax in India

  1. No Direct Tax on Remittance:
    • Receiving funds from abroad into India is not taxed simply for the act of receipt. The recipient does not incur tax just for receiving the money.
  2. Purpose of Remittance:
    • The tax implications depend on the reason for the remittance:
      • Personal Remittances: Money sent for personal use, such as family support, is not taxable.
      • Gifts: If the remittance is a gift, it is generally tax-exempt if received from a relative. However, gifts over ₹50,000 from non-relatives in a financial year are taxable.
      • Business or Professional Income: Money received for services rendered or business transactions is considered income and taxed accordingly.
  3. Income Tax on Earnings:
    • If the remittance is income (e.g., salary, professional fees, business income), it must be declared and will be taxed according to Indian income tax laws, based on the recipient's total income and applicable tax slab.
  4. Reporting Foreign Income:
    • Any foreign income must be reported in the recipient's annual income tax return in India. The Double Taxation Avoidance Agreement (DTAA) may provide relief if the income has already been taxed abroad.
  5. Goods and Services Tax (GST):
    • For businesses, services exported outside India are usually zero-rated under GST, meaning no GST is charged on such exports.

Example Scenarios

  1. Personal Remittance:
    • Raj receives $1,000 from his brother in the USA for family support. This amount is not taxable in India.
  2. Gift:
    • Seema receives ₹100,000 from a friend in the UK. Since this amount exceeds ₹50,000 and is from a non-relative, it is taxable for Seema.
  3. Business Income:
    • Anil, a freelance graphic designer, receives $5,000 for services provided to an Australian client. This income must be declared and will be taxed based on Anil’s total income and tax slab.
  4. Salary:
    • Priya works for an overseas company and gets paid $3,000 monthly into her Indian bank account. This salary is considered her income and will be taxed according to Indian income tax laws.

Which bank is good for inward remittance?

The best bank for inward remittance depends on specific needs such as fees, service speed, and customer service quality. Here are some considerations:

  1. State Bank of India (SBI):
    • Pros: Widely used, reliable, extensive network.
    • Cons: Higher receiving fees compared to some private banks.
  2. HDFC Bank:
    • Pros: Competitive fees, good online services.
    • Cons: Slightly higher exchange rate margin.
  3. ICICI Bank:
    • Pros: Competitive rates, extensive international presence.
    • Cons: Receiving fees may be higher for smaller amounts.
  4. Axis Bank:
    • Pros: Popular with businesses, competitive fees.
    • Cons: Similar fee structure to other major banks.
  5. Standard Chartered Bank:
    • Pros: Good for international clients, competitive rates.
    • Cons: Higher intermediary bank fees in some cases.

Bank charges for inward remittance in india

Bank Name Sending Bank Fee (Approx.) Receiving Bank Fee (Approx.) Intermediary Bank Fee (Approx.) Exchange Rate Margin Notes
State Bank of India (SBI) $25 - $50 ₹500 - ₹1,000 $10 - $30 1-3% Reliable and widely used
HDFC Bank $25 - $50 ₹200 - ₹750 $10 - $30 1-2.5% Good online services
ICICI Bank $25 - $50 ₹200 - ₹750 $10 - $30 1-2.5% Competitive rates
Axis Bank $25 - $50 ₹500 - ₹1,000 $10 - $30 1-3% Popular with businesses
Kotak Mahindra Bank $25 - $50 ₹300 - ₹800 $10 - $30 1-3% Good customer service

Does bank remittance have extra charges?


Bank Name Receiving Fee (Approx.) GST on Fee Currency Conversion Charges SWIFT/Intermediary Bank Charges
State Bank of India (SBI) ₹500 - ₹1,000 18% on receiving fee 0.5% - 1% on amount $10 - $30
HDFC Bank ₹200 - ₹750 18% on receiving fee 0.5% - 1% on amount $10 - $30
ICICI Bank ₹200 - ₹750 18% on receiving fee 0.5% - 1% on amount $10 - $30
Axis Bank ₹500 - ₹1,000 18% on receiving fee 0.5% - 1% on amount $10 - $30
Kotak Mahindra Bank ₹300 - ₹800 18% on receiving fee 0.5% - 1% on amount $10 - $30

What are your cheaper alternatives for inward remittance to India? 

Hands down, Karbon Forex. 

We charge a flat fee of 2% on all business inward remittances.

And what’s more? 

Our customer services are incomparable to our competitors, for we,  walk with you through the entire process, until your hard earned money reaches your indian bank account. 

5 Reasons Why Karbon Forex

Karbon Forex provides the ultimate business inward remittance product at the lowest cost for all B2B international remittances. Here’s how :- 

  1. Low Transaction Fees: Karbon Card offers competitive transaction fees, helping you save on each transfer.
  2. Transparent Pricing: Say goodbye to hidden fees! Karbon Card provides transparent pricing, so you know exactly what you're paying for.
  3. Fast and Secure Payments: Enjoy fast and secure payment processing with Karbon Card's cutting-edge technology.
  4. Easy Integration: Karbon Card integrates seamlessly with your existing systems, making it easy to start accepting international payments right away.
  5. Excellent Customer Support: Need assistance? Karbon Card's dedicated support team is here to help you every step of the way.

Say hello to affordable and hassle-free international payments with Karbon Forex! Contact us to start saving today!

The views expressed in the blogs on this page are solely the opinions of the authors and do not constitute expert advice. While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. We disclaim any liability for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

Similar posts

Discover Related Reads

Get a Free Forex Quote Today!

Save Money on Your Next International Transaction
Get a Quote