To bring money from India to the USA, you route the funds through the right Indian bank account, clear Indian tax paperwork before the wire, and then handle US reporting after the money lands. Indian residents can send up to $250,000 per financial year under the Liberalised Remittance Scheme. Non-Resident Indians repatriating from an NRO account can move up to $1 million per year. Both sides of the transfer carry filing duties, and the US penalties for missing them can be larger than the transfer itself.
Which Indian Account the Money Comes From
The account type decides how hard the transfer will be. Funds you earned or saved outside India belong in a Non-Resident External (NRE) account. NRE balances are freely and fully repatriable because the money originated abroad, so you can wire them to the United States without the tighter controls that apply to Indian-earned wealth.
Income earned inside India goes into a Non-Resident Ordinary (NRO) account: rental income, pension payments, dividends from Indian shares, and proceeds from selling real estate or inherited assets. Repatriating NRO funds requires extra tax documentation because Indian authorities need to confirm all applicable taxes have been paid before the money leaves.1Reserve Bank of India. Repatriation of Sale Proceeds Depositing Indian-sourced income into an NRE account is one of the fastest ways to trigger a regulatory problem.
How Much You Can Send in a Year
$250,000 Under the Liberalised Remittance Scheme
The Liberalised Remittance Scheme (LRS) lets every resident individual, including minors, remit up to $250,000 per financial year (April through March) for any combination of permitted current or capital account transactions.2Reserve Bank of India. Master Direction – Liberalised Remittance Scheme The cap covers gifts, investments, travel, education payments, and property purchases abroad. It is a combined annual ceiling, not a per-transaction limit.
$1 Million for NRI Repatriation from NRO
Non-Resident Indians repatriating funds from NRO accounts work under a higher ceiling: up to $1 million per financial year. This covers the typically larger sums from selling inherited property or receiving estate distributions. The bank will need an undertaking from you and a certificate from a Chartered Accountant confirming tax compliance.1Reserve Bank of India. Repatriation of Sale Proceeds Moving more than $1 million in a single year requires special permission from the RBI.
Penalties for Breaching the Limits
Under Section 13 of FEMA, contravening the Act’s provisions carries a penalty of up to three times the amount involved. Where the amount cannot be quantified, the penalty can reach ₹2 lakh, with an additional ₹5,000 per day that the violation continues.3Embassy of India, Washington D.C. Foreign Exchange Management
Indian Paperwork You Need Before the Wire
Every outward remittance requires the sender’s Permanent Account Number (PAN). PAN is mandatory for all LRS transactions so Indian tax authorities can trace the money.4Reserve Bank of India. FAQs – Liberalised Remittance Scheme For the receiving side, you need the US bank’s SWIFT or BIC code and its ABA routing number.
Form 15CA and Form 15CB
Before the bank processes the transfer, you file Form 15CA and, in many cases, Form 15CB through India’s income tax e-filing portal. Form 15CA is a self-declaration covering the remitter, the beneficiary, the amount, and the nature of the payment (gift, investment, property sale proceeds, and so on). Form 15CB is a certificate from a Chartered Accountant confirming that the correct taxes have been paid on the money being sent, which matters most when the funds represent taxable income like capital gains from a property sale. A mismatched amount or wrong purpose code on these forms is one of the most common reasons transfers get held up.
The A2 Form and Purpose Code
With 15CA and 15CB uploaded, you submit the A2 Form to your bank. The A2 is the official foreign exchange remittance application, documenting the purpose and amount of the transaction.5Reserve Bank of India. Form A2 You also select the correct RBI purpose code. Education-related transfers such as tuition and hostel fees use code S0305. Choosing the wrong purpose code can trigger a mismatch in the RBI’s reporting system and delay or freeze the transfer.
Tax Collected at Source on Your Remittance
Banks are required to collect tax upfront on outward LRS remittances. It functions as an advance against your Indian income tax liability, not an extra tax, and you claim it as a credit when you file your return. If your actual liability is lower, you get the difference back as a refund.
As of April 2025, no TCS applies on LRS remittances up to ₹10 lakh per financial year. Above that combined threshold, the rates depend on purpose:
- Education funded by an approved loan: 0% TCS regardless of amount.
- Education or medical expenses not funded by a loan: 2% TCS on the amount exceeding ₹10 lakh, reduced from 5% in the Union Budget 2026.
- All other purposes: 20% TCS on the amount exceeding ₹10 lakh.
A 20% upfront deduction on a large remittance ties up real money for months until the refund clears, so plan the timing.
Sending the Wire and What Arrives
After the bank approves your paperwork and confirms you are within LRS or NRO limits, it initiates the wire through SWIFT and gives you a transaction reference number. The money typically reaches the US account within two to five business days.
On the Indian side, expect a flat remittance fee of roughly ₹500 to ₹1,500, plus whatever margin the bank builds into the exchange rate. The US receiving bank may charge $0 to $25 depending on the institution, and premium accounts often waive it. Intermediary banks sometimes deduct their own fee from the transfer, so the sum that lands may be slightly less than what you sent.
Most large Indian banks handle the whole process through net banking, with digital uploads of tax forms. For a first-time property sale repatriation or another high-value case, going to the branch in person often saves time because officers verify documents on the spot.
US Reporting After the Money Arrives
Sending the money is only half of it. If you are a US person (citizen, green card holder, or tax resident), the IRS and FinCEN have their own filings tied to your foreign accounts and to the character of the funds you received. The penalties for missing these are often larger than the transfer itself.
FBAR (FinCEN Report 114)
If the combined value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year, you must file a Report of Foreign Bank and Financial Accounts with FinCEN.6Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR) That includes NRE accounts, NRO accounts, and fixed deposits in Indian banks. The threshold applies to the aggregate across all foreign accounts, not each one individually.
The FBAR is due April 15 following the reported year, with an automatic extension to October 15 that requires no request.6Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR) A non-willful failure to file carries a penalty up to $10,000. Willful violations carry penalties up to the greater of $100,000 or 50% of the account balance.
FATCA (Form 8938)
Separately from the FBAR, FATCA requires you to report specified foreign financial assets on Form 8938, filed with your income tax return. For taxpayers living in the United States, single filers must file if total foreign asset value exceeds $50,000 on the last day of the tax year or $75,000 at any point during the year. For married filing jointly, the thresholds are $100,000 and $150,000.
FBAR and Form 8938 overlap heavily, and you may need to file both for the same accounts. They go to different agencies and have different thresholds, so one does not substitute for the other.7Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
Form 3520 for Large Gifts or Inheritance
If the money is a gift or bequest from a nonresident alien individual or a foreign estate and the total exceeds $100,000 in the tax year, you must report it on Form 3520.8Internal Revenue Service. Instructions for Form 3520 You separately identify each gift over $5,000. For gifts from foreign corporations or partnerships, the reporting threshold is $20,116 for the 2025 tax year, adjusted annually for inflation.9Internal Revenue Service. Large Gifts or Bequests from Foreign Persons
The penalty for failing to file Form 3520 is 5% of the unreported gift’s value for each month or partial month you are late, up to 25%.10Internal Revenue Service. International Information Reporting Penalties On a $500,000 inheritance from an Indian relative, that is a potential $125,000 penalty for a form many recipients have never heard of.
Avoiding Double Taxation Under the India-US Treaty
The United States taxes its citizens and residents on worldwide income, including income earned in India. If you already paid Indian tax on rental income, capital gains from a property sale, or dividends, you would otherwise be taxed twice on the same money. The India-US Double Taxation Avoidance Agreement lets each country credit taxes paid to the other.11Internal Revenue Service. Tax Convention with the Republic of India
You claim a Foreign Tax Credit on your US return using Form 1116. The credit offsets your US tax by the Indian income tax you already paid on the same income.12Internal Revenue Service. Foreign Tax Credit – How to Figure the Credit The net effect is that you pay the higher of the two countries’ rates, not both stacked. The treaty does not remove your duty to report the income on your US return; it only prevents you from being taxed on it twice. Skipping the reporting, even when the credit fully offsets the US tax, can itself trigger penalties.