Receiving Money From Abroad: Things to Do
Receiving money from abroad starts with the right account — NRE (fully repatriable, tax-exempt interest) or NRO (for India-sourced income or funds with repatriation conditions) for NRIs, a standard account for residents, with rupee gifts to NRI relatives routed to NRO accounts. This guide covers the main inward channels (SWIFT, online remittance platforms, the Money Transfer Service Scheme for personal remittances, and Rupee Drawing Arrangements common for NRI family transfers), and the Foreign Inward Remittance Certificate/Advice (FIRC/FIRA) — essential evidence for exporters of services claiming GST zero-rating via LUT, and useful source-of-funds proof generally, best requested at the time of receipt rather than later. We cover purpose codes on the receiving side and why consistency with the payment’s actual nature matters, and — the section that determines everything downstream — the four distinct tax treatments: gifts from relatives (exempt under Section 56(2)(x)), gifts from non-relatives (taxable above ₹50,000/year cumulatively), export proceeds (business income, with FEMA realisation-period obligations separate from tax filing), and proceeds from sale of foreign assets (potential capital gains, with the remittance being separate from the underlying tax event).