Sending money to India from Canada (or the other way around)? We break down what you need to know including the maximum limit for money transfers from Canada to India, limits on remittances from India and key tax rules.<\/p>
There is no maximum limit for money transfers from Canada to India. You can send as much as you want. But beware that if you\u2019re sending more than \u20b950,000 to someone in India who isn\u2019t a blood relative (including spouses, children, grandchildren, siblings and in-laws), they\u2019ll have to pay tax to the Indian government.<\/p>
There is no tax for recipients on money transferred from Canada to India when it\u2019s being sent to blood relatives. In general, \u201cblood relatives\u201d \u2014 including spouses, children and grandchildren, siblings or in-laws \u2014 do not pay tax on any amount that you send.<\/p>
However, if you\u2019re sending more than \u20b950,000 to someone in India who isn\u2019t a blood relative, they\u2019ll need to report it on their taxes. No matter how you send the money, your recipient could be on the hook for a gift tax if they aren\u2019t a blood relative, as regulated by the Indian Income Tax Act<\/a>. If the money is sent as inheritance or as a wedding gift, however, there won\u2019t be any taxes levied on it by the Indian Income Tax Department.<\/p> Individual residents in India can transfer a maximum of USD$250,000 overseas each year (from April 1 to March 31 the following year), which includes transfers to Canada. You need a Permanent Account Number (PAN) to send funds. There is no limit to the number of remittances you can make from India, but the total amount can\u2019t exceed USD$250,000 annually.<\/p> Prior to October 1, 2023, residents of India had to pay a 5% tax on remittances above \u20b9700,000 (around CAD$11,500). However, as of October 1, 2023, any money sent from India \u2013 except funds sent for medical or educational purposes \u2013 is subject to a 20% tax, including transfers to to Canada.<\/p> Medical and education remittances will continue to be taxed at a rate of 5%. Additionally, any transfers from India for education expenses paid from an education loan will continue to be taxed at a rate of 0.5%.<\/p> One other notable exception to the 20% tax rule is any payment by an individual India resident using their international Debit or Credit cards for amounts up to INR\u20b9700,000 in a financial year.<\/p> Remittances from India can only be sent for certain reasons like gifts, donations, supporting close family members, business travel and studying abroad. You can\u2019t send money from India for some purposes like buying lottery tickets or buying Foreign Currency Convertible Bonds (FCCBs) traded by Indian companies in overseas secondary markets.<\/p>Maximum limit for a money transfer from India to Canada<\/u><\/h3>
Tax on sending money from India to Canada<\/h3>
CAD to Indian Rupee: Historical exchange rates<\/h3>\n