Sending Money Abroad? 5 Traps Costing You Thousands

Sending money abroad or buying foreign currency isn't as straightforward as it looks. Banks, apps, and exchange counters all charge differently. Here's how to avoid overpaying every single time.

Here's what happened: Digital forex platforms for individuals and businesses are expanding in India, letting you book foreign exchange rates, send remittances, and manage trade payments online without visiting a branch.. RBI's Liberalised Remittance Scheme (LRS) allows resident Indians to remit up to $2,50,000 per financial year for permitted purposes including education, travel, gifts, and investments abroad.. TCS (Tax Collected at Source) at 20% now applies to LRS remittances above ₹7 lakh per year — though education loans and medical remittances attract lower rates of 0.5% and 5% respectively..

What you should do: Compare the all-in cost — exchange rate markup plus SWIFT fee plus receiver-end correspondent bank charges — before confirming any international wire transfer.. Check RBI's authorised dealer list online before using any forex platform or money changer; never hand over money to an unlicensed operator, however attractive the rate.. Track your total LRS remittances across the financial year — once you cross ₹7 lakh, TCS kicks in at 20%, which you can reclaim only while filing your ITR..

Book your forex rate digitally during Indian market hours (9 AM–5 PM on weekdays) — rates are tighter then because inter-bank liquidity is highest and your bank's markup is typically narrower.

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