How To Pay University Fees In The USA From India

Different Ways to Pay University Fees In The USA From India

When it comes to pay university fees In The USA From India, you have multiple options to choose from. Before we dive into those options, note that whichever option you choose, you must abide by the Liberalised Remittance Scheme (LRS) regulations. As per it, you can send up to USD 250,000 (INR 20,682,750) per financial year (April-March). Additionally, you must pay a 5% tax on remittances above INR 700,000. However, if the funds are for medical or educational purposes, you are subject to a 20% tax. 

 

1. Debit Cards or Credit Cards 

If you have a debit or credit card, you can transfer money online to a country like the USA. Most banks have partnerships with companies like Visa, Mastercard, Amex, etc., that help in the process. You can’t do it on a whim; you must activate this feature on your card to actually use it, be it online or offline.

Here’s what you will need to make the transfer abroad:

• Beneficiary’s name
• Beneficiary’s address
• Beneficiary’s country name
• Beneficiary’s bank account number
• Beneficiary’s bank name
• Beneficiary’s bank SWIFT code
• Beneficiary’s bank address
• Beneficiary’s bank transit code

Note that you can send a minimum and maximum amount of money for international transfers. This varies from bank to bank. For instance, you can send only INR 20 lakhs daily via ICICI Bank; however, HDFC Bank has limited this amount to INR 7,44,462 daily. The time taken to make these transfers varies from 2 to 5 days, depending on the bank. 

For the transfer, the banks may charge additional charges like markup fees, GST, etc., which again depends on the bank. For example, ICICI Bank charges:

1. Markup fee – 3.5% + Goods and Services Tax (GST)
2. ATM Cash Withdrawal Fee overseas – Rs. 125 + GST
3. Balance Enquiry overseas – Rs. 25 + GST

2.  Wire Transfer

Wire transfers, usually used for large sums of money, are electronic funds transfers (ETF) that go from one bank to another. You can transfer money to the USA through a SWIFT transfer if you have a savings account. Here’s what you will need:

• Beneficiary’s bank account number
• Beneficiary’s bank name
• Beneficiary’s bank SWIFT code
• Beneficiary’s bank address
• Beneficiary’s bank transit code

Once you start the process, it will take 1 to 3 working days for the transfer to go through. Do note that the exact time varies from bank to bank and is dependent on specific transfer details. Also, banks might charge a small fee for the wire transfer. For instance, ICICI Bank charges residents INR 1000 for wire transfer to the USA through Internet banking and INR 1500 for a wire transfer to the USA through a bank branch.

Read More : Wire Transfers vs Forex Cards: A Comparative Guide

3. Demand Draft

Banks provide you with an additional choice if you don’t trust internet sites when pay university fees in the USA from India: a foreign exchange bank draft. All you have to do is visit the bank, complete the form, and turn it in for processing. A signed indemnification letter or deposit form could also be required.

The bank may charge a minimum amount to draw this check. This fee varies from bank to bank. For the USA, the charge is usually INR 500, along with the applicable service tax. It takes around 1-21 international working days for the transfer to go through. 

4. Forex Cards

Forex cards offer a way to carry foreign currency in your pocket. Many banks, such as HDFC, ICICI, etc., offer forex cards. You can get this card and load money when you are in India. The best part is that the exchange rate will be locked when you load the money, protecting you from fluctuating exchange rates. 

You can get a Forex card by filling out the application form for it either online or offline. You’ll need to give some personal details and submit a few documents:

• Valid Passport
• Visa
• PAN Card
• Address Proof 
• Passport size photo

Enter the amount to calculate the cost and make the payment. After this, you can get the card delivered in just 3 days. 

5. Online Remittance Company

Online remittance companies are financial services that allow you to send money to another country over the Internet. These companies like HiWiPay give various payment options like bank transfer (ACH or SWIFT), debit or credit card, bank draft, or international money orders. These companies offer complete transparency, competitive rates, and efficient processes. They are often much faster than banks, transferring money in 24 hours.

To send money from India to the USA, you must fill out your personal details, beneficiary’s details, and enter the amount. Then, digitally sign the A2 form to generate challan. Then, make the payment from your  bank account or net banking.

Choose the right transfer method by looking at this table and getting a brief overview of the factors you must consider:

Transfer method	Digital Process	Minimum Amount	Maximum Amount	Exchange rate	Markup fees	Duration
Debit or Credit Card (Bank)	Yes	INR 800 per transaction	USD 250,000 per year	1 USD = 83 INR	3.5% + 18% (GST)	2-5 days
Wire Transfer (Bank)	Yes	INR 800 per transaction	USD 250,000 per year	1 USD = 83 INR	N/A	1-3 days
Foreign Currency Bank Draft (Bank)	Digital and physical both	INR 800 per transaction	USD 250,000 per year	1 USD = 83 INR	N/A	1-21 days
Forex Card (Bank)	Digital	N/A	N/A	N/A	2%	N/A
Online Remittance Companies	Yes	INR 1000 per transaction	USD 250,000 per year	1 USD = 83 INR	1% per transaction	24 hours to 48 hours

Note: The numbers mentioned in the table vary by bank, company, location and currency exchange rate. Last updated on 08/05/24.

Tax on Foreign Remittance

When you transfer money to pay university fees in the USA from India , you must consider the tax involved. The TCS rate changed. Under the Liberalised Remittance Scheme (LRS), the TCS rate has been increased from 5% to 20%, effective from October 1, 2023. Luckily, tax rates for educational and medical purposes have not been included in this. 

Here are the TCS rates for education remittances from India to the USA:

Amount of Remittances	Purpose	TCS Rate
Below INR 7 Lakhs	Education	Nil
INR 7 Lakhs or more	Education Through Loan	0.5%
INR 7 Lakhs or more	Education Not Through Loan	5%

Note that there are certain TCS exceptions for education-related transactions, such as scholarships, low annual income (INR 2 lakh or below), and equivalent TDS deposits.

Read More : TCS on Foreign Remittance for Education

Charges to Consider While Pay University Fees In the USA from India

Apart from the TCS charges, you must consider the following charges as well while pay university fees in the USA from India: 

1. Nostro

A bank account created in a foreign country with the goal of transferring money in the country’s currency is known as a Nostro account. For the transfer, the bank charges a small fee called nostro charge; the amount varies from bank to bank. 

2. GST

Goods and services tax (GST) charged by the bank for pay university fees in the USA from India varies on the amount of transaction.

Amount of Currency Exchanged (ACE)	GST Rates	Minimum GST	Maximum GST
Upto INR 1 Lakh	0.18% of the transfer amount	INR 45	INR 180
Between INR 1 Lakh and INR 10 Lakh	INR 180 + 0.09% of the transfer amount	INR 180	INR 990
Above INR 10 Lakh	INR 990 + 0.018% of the transfer amount	INR 990	INR 10,800

Note: The numbers mentioned in the table are subject to changes by the government. Last updated on 08/05/2024.

3. KYC Charges

It is mandatory to complete KYC. Also, you must pay KYC charges if you are transferring money online, but if you are doing it offline, KYC is free.

4. Prepayment Charges

If you are pay university fees in the USA from India through a financial arrangement like an educational loan and if you settle your outstanding balance early, then some banks may impose prepayment charges. They are only applied when the prepayment is done, and it usually amounts to 5% of the remaining balance.

The Fastest Way To Send Money To The USA From India

Why wait 3 to 21 days and transfer money via banks when you can send money within 24 hours with HiWiPay?

HiwiPay is a platform that offers a variety of features designed to simplify cross-border payments, particularly for students studying abroad. With HiWiPay, you can not only forget about waiting for days for the transfer to go through, but also long bank queues, paperwork hassles, and high markup fees. The best part? You can do it from anywhere, anytime.

1. Simple Remittance: With HiWiPay, you don’t need to physically submit the LRS/A2 forms. You can even forget about repetitive transaction filings and physical copies of KYC. All you need to do is set up your account once and enjoy money transfers without any issues.
2. Cost-Effective and Transparent: The fully digital international payment process eliminated the need for physical documentation, making the process transparent and cost-effective.
3. Fast Processing Time: HiwiPay provides a 48-hour window for the funds to reach the beneficiary account, but most of the transfers take place within 24 hours.
4. Secure Transfers from Anywhere, Anytime: HiWiPay offers secure transfers at competitive rates. You can make the transfer from anywhere, anytime.

How To Pay University Fees in The USA From India To With HiWiPay

Step 1: Fill out the student details and complete the student KYC. 

Step 2: Then, enter the beneficiary account details and KYC. Confirm the details.

Step 3: Enter the sender’s details and KYC. Confirm the details.

Step 4: Digitally sign the A2 form and confirm the final amount in INR to generate the challan. Click on “Finish” to make the payment.

Documents Required for Making an International Transfer to Pay University Fees

You need the following documents to pay university fees in the USA from India:

1. University acceptance letter (must include the amount to be transferred)
2. Valid Indian passport of the student
3. Valid Indian ID proof of the sender (PAN card, Aadhar Card or driving license)
4. PAN Card of the sender
5. Duly Filled A2 Form cum Declaration
6. KYC Documents like a passport or Aadhar Card

Note: The exact requirements may vary depending on the bank or service provider you choose for the transfer. So, do check with them before initiating the transfer. 

Conclusion

In brief, pay university fees in the USA from India demands careful consideration of payment methods, tax implications, and associated charges. Platforms like HiWiPay offer streamlined solutions, ensuring swift, transparent transactions for students studying in the USA, allowing them to focus on their education without financial worries.

Frequently Asked Questions

References:

Works Cited

“About International Transactions – ICICI Bank.” www.icicibank.com, www.icicibank.com/personal-banking/cards/credit-card/travel-easy/international-transactions. Accessed 9 May 2024.

“Check Remittance Charges & Remittance Fees Applicable on Online Transfers at HDFC Bank.” www.hdfcbank.com, www.hdfcbank.com/personal/pay/money-transfer/remitnow/fees-and-charges. Accessed 9 May 2024.

“Foreign Currency Demand Draft | ICICI Bank.” www.icicibank.com, www.icicibank.com/personal-banking/accounts/outward-remittance/foreigndemandd. Accessed 9 May 2024.

“How to Get a Forex Card What Are the Documents Required for a Forex Card | HDFC Bank.” www.hdfcbank.com, www.hdfcbank.com/personal/resources/learning-centre/pay/how-to-get-a-forex-card. Accessed 9 May 2024.

“Reserve Bank of India – Frequently Asked Questions.” www.rbi.org.in, www.rbi.org.in/Scripts/FAQView.aspx?Id=115. Accessed 9 May 2024.

Saxena, Aman. “How to Transfer Money to a Foreign Bank Account from India.” Wise, 1 July 2022, wise.com/in/blog/transfer-money-to-foreign-bank-account-from-india. Accessed 9 May 2024.

taxguru_in, and CA Mamta Chopra. “New 20% TCS on Foreign Remittance from 01.10.2023 Simplified.” TaxGuru, 30 Sept. 2023, taxguru.in/income-tax/new-20-percent-tcs-foreign-remittance-oct-2023

“Wire Transfer.” www.icicibank.com, www.icicibank.com/personal-banking/online-services/funds-transfer/outward-remittance/branch-transfer/wire-transfer. Accessed 9 May 2024.