What is the limit and tax implication of Sending Money to India from the USA?

In theory, there is absolutely no limit to how much money you can send to India, provided you earned your money legally and paid your taxes but the USA is special. In practice, depending upon which channel you are using for sending money to India, you might have some limits. Similarly, you will also hit the daily limit of transactions you can do with your local bank e.g. paying bills up to 50,000 dollars daily for remittance purposes.
There is also a limit of US $14,000 per person per year for the tax-free transaction. Any amount sent above the US $14,000 per person per year, the sender is responsible for paying the gift taxes in the USA. Though, if you are married you can gift up to USD 28,000 + USD 28,000 = USD 56K if you include you and your spouse as a giver and your mom and dad as a beneficiary of the gift.

In this article, we'll see how much money you can send daily, weekly, and monthly by using different remittance channels, particularly from the USA to India, and any tax implication by sending a large amount of money from the USA to India.

Btw, If you are looking to send money abroad consider TransferWise. It’s a great tool for sending and receiving money internationally with low fees — much cheaper than using your local bank. You can also get your own local bank account details in Europe, the UK, the US, Australia, and New Zealand with the TransferWise Borderless account

And, If you are looking for alternatives, you can also check out CurrencyFair, which also have a promotion for all new customers that can be used that has 3 free transfer.

First thing first, once you pay your taxes in the USA, you can send any amount of money to India but due to safety, security, convenience, and exchange rate benefit I advise sending in multiple small chunks for example if you want to send 50K USD then instead of sending in one go you can send in two transactions of 25K USD each or 3 transactions of 16K, 17K, and 17K USD.

You can transfer this amount by using a wire transfer to your NRE or NRO account. Most of the Indian banks have tied up with US banks, also known as correspondent banks which help NRIs to send money to India quickly and efficiently. For example, Wells Fargo has some understanding with ICICI and they only charge $5/transaction and also give a good exchange rate.


In general, once the money is taxed once, it's not taxed again and only interest earned on money is taxed. When you send money to India from the USA there is a tax implication on India if you send money to someone who is not your children, spouse, or parents. For them, that money is considered as income and they have to pay income tax in India on that money + any interest earned by that money in their bank account.

But, when you send money to India from the USA in your parent's bank account or your wife's normal savings account it is considered as a gift to them and a gift is not taxed in India. But, suppose you send 50K USD i.e. 34 lakh INR, and your wife or parents created a fixed deposit which earned 3 lakh Rs per annum on interest then they have to pay tax on that money in India.

What is the limit and tax implication of Sending Money to India from the USA?



In short, there is no limit to sending money to India from the USA if you have paid your taxes. The money you send to India will qualify as a Remittance and it is your earning after you pay your taxes. However, you should maintain sufficient documentation of your US tax returns, W-2 forms, etc.

Though the daily limits i.e. the maximum amount of money you can send from the USA to India daily will depend upon several factors like the limit imposed by online/offline remittance services you will use like TransferWise, Western Union, Money2India, Xoom, or Bank wire transfer and daily transaction limit imposed on your saving bank account by your local bank.

P. S. - If you are looking to send money abroad consider TransferWise. It’s a great tool for sending and receiving money internationally with low fees — much cheaper than using your local bank. You can also get your own local bank account details in Europe, the UK, the US, Australia, and New Zealand with the TransferWise Borderless account

P. P. S - And, If you are looking for alternatives, you can also check out CurrencyFair, which also has a promotion for all new customers that can be used that has 3 free transfers.

1 comment:

  1. You mention that once the money is taxed, it's not taxed again and there is no limit, but you also specify there's a gift tax on transfers over 14K. Can you clarify more on how much gift tax does the sender pay for transfers over 14K to a family member?

    ReplyDelete