Compare International Money Transfers from India: True Cost

To compare international money transfers from India, ignore the advertised fee and calculate one number: how many rupees leave your account for every unit of foreign currency that actually lands in the recipient's account. That figure captures the exchange-rate markup, the transfer fee, GST on currency conversion and any intermediary bank deductions together. As of October 2026, also check whether your yearly total crosses the ₹10 lakh TCS threshold, because that changes your cash flow even though the tax is refundable.

This guide shows the five cost components, a side-by-side worked example and a checklist you can use with any bank or remittance app.

The five costs inside every outward remittance

When a bank or app quotes "zero fee", it is usually earning through one of the other components. Here is what to look for.

1. Exchange-rate markup

Every provider buys currency at close to the wholesale (mid-market) rate and sells it to you at a higher rate. The gap is the markup. Banks often build in 1% to 2% or more on card-rate or "TT selling" rates; online remittance services tend to quote rates closer to mid-market. This is usually the largest cost and the least visible one.

2. Transfer or handling fee

A flat fee per transaction, often ₹500 to ₹1,500 at banks for a SWIFT wire, plus 18% GST on the fee. Some apps charge a percentage instead. A flat fee matters more on small transfers.

3. GST on currency conversion

GST applies to the value of the currency exchanged, using a slab system. As of October 2026, providers such as HDFC Bank publish it as:

These come from 18% GST on a deemed taxable value (1% up to ₹1 lakh, then ₹1,000 + 0.5%, then ₹5,500 + 0.1%).

4. Correspondent (intermediary) bank charges

SWIFT payments often pass through one or two intermediary banks. Under the SHA (shared) or BEN (beneficiary pays) option, these banks may deduct USD 10 to 30 or more before the money arrives. Under OUR, you pay all charges upfront and the recipient gets the full amount. Ask which option the provider uses.

5. TCS (a cash-flow cost, not a final tax)

Tax Collected at Source applies to remittances under the Liberalised Remittance Scheme (LRS). As of October 2026, under Section 394(1) of the Income-tax Act, 2025 (old Section 206C(1G)):

The ₹10 lakh threshold is per PAN, counted across all banks and providers. TCS shows up in Form 26AS/AIS and is adjusted against your tax or refunded when you file. Our guide to the documents for sending money abroad explains the paperwork and the TCS calculation in more detail.

Worked example: sending USD 10,000 to a family member

Assume the mid-market rate is ₹88.00 per USD (an illustrative figure; check the live rate on the day). You want to send USD 10,000 to a sibling studying abroad for living expenses (purpose: maintenance), and this is your first remittance of the year, so no TCS applies.

Provider A (bank wire, SHA charges)

• Quoted rate: ₹89.20 per USD → 10,000 × 89.20 = ₹8,92,000
• Handling fee: ₹1,000 + 18% GST = ₹1,180
• GST on conversion of ₹8,92,000: ₹180 + 0.09% × ₹7,92,000 = ₹180 + ₹712.80 = ₹892.80
• Intermediary bank deducts USD 20, so your sibling receives USD 9,980
• Total paid: ₹8,94,072.80

Provider B (online remittance service, OUR charges)

• Quoted rate: ₹88.30 per USD → 10,000 × 88.30 = ₹8,83,000
• Fee: ₹1,500 (GST included)
• GST on conversion of ₹8,83,000: ₹180 + 0.09% × ₹7,83,000 = ₹180 + ₹704.70 = ₹884.70
• Recipient receives the full USD 10,000
• Total paid: ₹8,85,384.70

Now compute the effective rate, rupees paid per dollar received:

Provider A looked cheaper on the fee line (₹1,180 vs ₹1,500), but the rate markup and the intermediary deduction made it roughly ₹10,500 more expensive for the same purpose. All figures here are illustrative.

If this pushed you over the threshold: suppose you had already sent ₹6 lakh earlier in the year for the same purpose. Your new total would be about ₹14.9 lakh, so roughly ₹4.9 lakh of this transfer would attract 20% TCS, close to ₹98,000 collected upfront. You get it back as credit when you file your return (you can estimate your final liability with our income tax calculator), but you need that cash available at the time of the transfer.

How to compare providers, step by step

1. Fix the receiving amount. Decide exactly how much foreign currency must arrive (a fee invoice or rent amount), then ask each provider what it will cost in rupees.
2. Get the all-in quote on the same day and time. Rates move during the day. A quote from the morning and one from the evening are not comparable.
3. Ask about intermediary charges. Confirm OUR vs SHA. For tuition payments, many universities require the full invoice amount, so short-receipts cause problems.
4. Add GST on conversion and fees. Some apps include it in the quote; banks often add it at debit.
5. Check your LRS running total. Add up everything sent this financial year (including debit and forex card loads) to see whether TCS applies.
6. Check speed and tracking. SWIFT transfers usually take one to three working days. Services with local payout networks may be faster. Ask for the UETR or a tracking reference.
7. Confirm the provider is authorised. Outward remittances must go through an RBI-authorised dealer bank or an entity operating under one. Do not use unregistered agents or "hawala" style channels, which are illegal under FEMA.

Bank vs online remittance service vs forex card: when each fits

For spending money while you travel, rather than sending it, see our comparison of a forex card vs credit card vs debit card.

Rules that apply to every transfer (as of October 2026)

• LRS limit: USD 250,000 per resident individual per financial year (April to March), for permitted current and capital account purposes.
• PAN is required for LRS remittances, along with Form A2 or the bank's combined application form.
• Prohibited uses include remittances for lottery, betting, margin or forex trading on overseas platforms, and to countries flagged as non-cooperative by FATF.
• Gift tax rules in India apply separately from TCS. Read our note on tax on gifts before sending large gifts to relatives abroad.

Key takeaways

• Compare transfers on the effective rate: total rupees paid divided by foreign currency received.
• The exchange-rate markup usually costs more than the visible fee.
• GST on currency conversion is slab-based and applies on top of fees.
• Choose OUR charges when the recipient must receive an exact amount.
• As of October 2026, TCS is nil up to ₹10 lakh a year per PAN, then 2% for education and medical and 20% for most other purposes; tour packages attract 2% from the start. TCS is refundable through your return.
• Use only RBI-authorised channels and keep your LRS total under USD 250,000 a year.