Receiving Money From Abroad in India| What You Need to Know
Are you a freelancer, an exporter, or someone receiving personal transfers from abroad? If yes, you’ve probably wondered: Can I receive money from abroad directly into my Indian bank account? The good news is, yes, you can—but it’s not always as straightforward as it sounds.
In this blog, we’ll break it all down receiving money from abroad in India. From the process, to the key factors you need to consider (like fees and conversion rates), we’ll also explore if there’s a smarter way to handle cross-border transfers. Let’s get started!
Can I receive money from abroad in my bank account in India?
The short answer? Absolutely! Indian citizens can receive foreign remittances directly into their savings bank accounts without restrictions, except under the Foreign Contribution Regulation Act, 1976.
Most international transfers today use the SWIFT network. Here’s how it works: the sender initiates an international wire transfer through their bank, providing your name, account number, and SWIFT code. Once processed, you’ll typically see the funds in your account within 5 business days.
Banks have long been the go-to option for receiving money from abroad. But with growing demand for faster, cheaper, and more convenient alternatives, platforms like Skydo, Wise, and Payoneer are becoming increasingly popular for receiving money from abroad in India. They offer international virtual accounts and simplified processes, which we’ll dive into later in this blog.
Should I Use My Savings Accounts to Receive Money from Abroad in India?
Yes, you can use your savings account to receive money from abroad. Under the foreign remittance scheme, there are no restrictions on the number of transfers or the amount, except for trade-related transactions, which have a cap of ₹15 lakh.
But here’s where it gets tricky—if you’re receiving both business payments and personal transfers in the same account, things can get messy.
In India, income earned through business activities is taxable under the Income Tax Act. Mixing personal and business transactions in a single account can complicate tax reporting, making it harder to calculate business income and deductions accurately.
Additionally, businesses are required to file income tax returns, GST returns, and other financial statements. Using your savings account for business funds can create challenges in maintaining accurate records, potentially leading to compliance issues or penalties for errors.
To keep things smooth and stress-free, it’s often better to separate personal and business transactions. Platforms like Skydo offer dedicated virtual international accounts that can help you manage business payments more efficiently—saving you time, money, and unnecessary headaches.
Receiving Money From India via Banks: Step-by-Step Guide
Here is the detailed process for receiving money from abroad in India into your savings bank account.
Step 1: Provide Your Bank Account Information
Provide the sender with all the bank account information, such as your bank name, account number, branch name, SWIFT code, and IBAN (if applicable).
Step 2: Transfer Confirmation
Wait for the sender to initiate the fund transfer and send you a payment confirmation with the reference number and the expected amount.
Step 3: Credit Confirmation
International wire transfers via SWIFT may take up to 5 days to credit the money in your bank account. Ensure you get a credit confirmation for the funds, which you can communicate with the sender.
Step 4: Foreign Inward Remittance Advice (FIRA)
If you are receiving an international payment, you need to obtain FIRA from your bank for the same. It is a document issued by banks as proof of receiving international payments. To get your FIRA, you’ll need to contact your bank directly. However, most banks charge a fee for issuing this document, which can add to your costs.
Things to Note while Receiving Money from Abroad in India via Banks:
Banks are often the default choice for receiving money from abroad in India. However, if you are receiving international payments via banks, here are a few things you should consider:
- Transfers via the SWIFT network can take up to 5 business days or longer due to intermediary banks and processing delays.
- While banks are secure and provide compliance documents like FIRA, this isn’t automatic or free—fees like ₹250 per FIRA and additional charges for duplicates or tracking SWIFT payments are common.
- On top of that, hidden costs like forex markups can significantly eat into your earnings. For instance, if you receive USD 5,000 as an international payment, you expect to get the amount converted at the real exchange rate (e.g., 1 USD = ₹84). At this rate, you would receive USD 5,000×84 = INR 4,20,000. However, banks often apply a forex markup, meaning they use a lower exchange rate to convert your money. If the bank offers ₹82 instead of ₹84, here’s what happens:$5,000 × ₹82 = ₹4,10,000.
This results in a difference of ₹10,000 between the real rate and the bank’s rate. In this example, the ₹10,000 is essentially what you lose to the bank’s forex markup.
International Virtual Bank Accounts with Skydo: An Alternate Way to Receive Payments from Abroad in India
Given these factors, a lot of exporters and freelancers are looking at alternatives like international virtual accounts to receive their payments from abroad in India.
Skydo for example, provides users with virtual bank accounts in countries like the US, UK, and Australia. Clients in these countries can send payments to these virtual accounts as local transfers, avoiding the hassle and cost of international transfers. Skydo then consolidates these local payments and transfers them to the recipient’s personal bank account in about 24 hours.
In terms of fees, since there are no SWIFT transfers, no SWIFT fees apply. Skydo simply charges a flat rate of USD 19 for payments under $2,000 and USD 29 for payments between USD 2,001 to USD 10,000. And most, importantly it offers live exchange rates with no markup or hidden fees. Meaning if the current exchange rate is INR 84 for 1 USD, that is exactly what you will get.
And not just that, Skydo also offers instant FIRA for every international payment absolutely free of cost. Make the smart move with Skydo—receive money from abroad effortlessly, affordably, and without hidden fees
What are the limitations on receiving business funds through a savings account?
The limitations include limited business banking features, regulatory compliance issues, processing delays, limited transaction and withdrawal volume and lower interest rates.
If I send money from abroad to a normal Indian savings account, will it be taxable?
How long does it usually take to receive money from abroad in India?
What is the best way to receive money from abroad in India?
Do I need to pay tax on money received from abroad in India?
