FAQ

Q. Is any KYC document required to make transactions through Fed-e-Remit?
No, as a Federal Bank account holder you are not required to submit any KYC document for availing this service provided your savings account is KYC complied.

Q. Who are called the Eligible beneficiaries under - Family Maintenance - (Maintenance of close relatives) ?
You can remit to the below mentioned persons:
(a) Members of your Hindu undivided family; or
(b) Your spouse
(c) You are related to the beneficiary in any of the manner indicated below:

• Father (including step-father)
• Mother (including step-mother)
• Son (including step-son)
• Son's wife
• Daughter
• Daughter's husband
• Brother (including step-brother)
• Sister (including step-sister)

Q. What is the Liberalised Remittance Scheme (LRS)?
Liberalised Remittance Scheme (LRS) is a facility available for making remittance up to USD 2,50,000 per financial year for permissible current or capital account transactions or a combination of both. All resident individuals are eligible to avail this facility. However, it is mandatory to have a PAN number for the individual to make a remittances under this scheme.

Q. What are the Transaction Limits in Fed-e-Remit?

• USD 25,000 or equivalent per day
• USD 2,50,000 or equivalent per financial year

Q. What are the documents required to perform transactions through Fed-e-Remit?
Depending on the selection of Purpose Code, the application will display the list of documents required to process the transaction.

Q. Which are the currencies permitted for transaction in Fed-e-Remit ?
Customers can make outward remittances in the 13 currencies mentioned below
AED, AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, QAR, SAR, SGD, USD.

Q. Which are the eligible purposes for which an individual can transfer money abroad?
The permissible purposes for transferring funds are :

• Maintenance of close relatives abroad
• Gift
• Education Abroad
• Medical Treatment Abroad
• Immigration Abroad
• Employment Abroad
• Student fees
• Travel For Education /Medical Treatment
• Business Travel/Tour expenses

Q. When would the transactions get processed?
Transaction booked on a bank working day (during weekdays) between 10.30 am to 4:00 PM IST will be processed on the same day. Transaction bookings received after 4:00 PM IST on bank working day and during weekend will be processed on the next working day of bank.

Q. When would the account get debited for transaction?
Customer's account would be debited when the transaction is approved and verified by the Bank central processing team.

Q. How can I track my transaction?
You can track the transaction status through Fed-e-Remit portal.

Q. Can a customer remit above USD 25,000 through Fed-e-Remit?
No, the Customer would have to visit the nearest Federal Bank branch for transactions above USD 25,000

Q. Is Cancellation of transaction possible in Fed-e-Remit?
Any cancellation request received for fund transfer will be handled by the Bank on a best effort basis

Q. Can customers get special Forex Rates in Fed-e-Remit?
Yes, the rates offered to a customer during the business hours, i.e. between 10.30 AM to 4.30 PM would be preferential rates. All the transaction carried out during non-business hours would be on card rates.

Q. Are trade related fund transfers allowed through Fed-e-Remit ?
No, only non-trade related purpose codes are available under this channel. For all other purpose codes, customers may visit nearest Federal Bank branch.

Q. What is Tax Collection at Source (TCS)?
The Finance Act, 2020 has introduced new provisions relating to TCS which require the collection of tax under sec 206C(1G) from a person remitting the amount outside India under Liberalised Remittance Scheme (LRS) of RBI. The provision for collection of TCS is applicable for Authorised Dealers. Authorised Dealer means a person authorized by RBI under sub section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999) to deal in Foreign Exchange or foreign security. Banks come under the preview of authorized dealer. Hence the new changes in TCS provisions shall be applicable to banks with effect from 1st October 2020.

Q. How TCS will be collected?
Tax shall be required to be collected at the rate of 5% on the amount or aggregate of the amount in excess of Rs. 7 Lakh in a financial year. In case the person remitting the amount does not have PAN or Aadhaar, the rate of TCS shall be 10 %. The section also provide for a lower rate of 0.5% for collection of tax by an authorised dealer on the amount or aggregate of the amounts in excess of Rs. 7 Lakh where the amount being remitted out of India is from a loan, which is obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education. In case the person remitting such amount does not have PAN or Aadhaar, the rate of TCS shall be 5%.

Q. What are the different purposes on which TCS is applicable?
TCS is applicable on all foreign remittance transactions that comes under LRS.

Q. Are there any exemptions on TCS?
The TCS provision shall not apply if the buyer is,-

• Liable to pay tax at source under any other provisions of the Act and he has deducted such amount (In such cases the Form no. 15CA/ 15CB need to be furnished stating such TDS applicability).
• the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate, the trade representation of a foreign State, a local authority as defined in explanation to clause (20) of section 10 or any other person notified by the Central Government in the Official Gazette for this purpose subject to such conditions as specified in that notification. (As of now no further entities are notified).
• How TCS will be computed on foreign remittance transactions?

Nature of Transaction liable to TCS under section 206C(1G) (w.e.f.01-10-2020)		Rate of TCS
		If PAN or Aadhaar is furnished	If PAN or Aadhaar is NOT furnished
Remittance under Liberalised Remittance Scheme of Reserve Bank of India exceeding Rs. 7 Lakh.	(a) If the remittance is from a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education	0.50%	5%
	(b) Others	5%	10%

*Please note that PAN is mandatory for Outward remittances under LRS scheme.

Q. Can the customer claim tax credit on TCS?
Yes, the customer may claim credit for TCS amount by filing the income tax return subject to applicable income tax provisions.

Q. Whether TCS on foreign remittance through Liberalised Remittance Scheme (LRS) will be applicable on entire amount of remittance or only on excess of Rs 7 Lacs?
TCS shall be applicable on amount in excess of ₹ 7 lakhs in a financial year and not on the total amount.

Q. Whether all foreign remittance transactions through Liberalised Remittance Scheme (LRS) will be charged at 5%?
Yes, normally all remittance out of India under the LRS of RBI, shall be charged TCS at 5%. In case, if the customer is not having PAN or Aadhaar the rate shall be 10%. Please note that in cases where the amount is remitted for the purpose of pursuing education through a loan obtained from any financial institutions, rate of TCS shall be 0.5% on amount exceeding ₹ 7 lakhs (5% if PAN/Aadhar is not available).

Q. Will GST be applied on Tax collected at source under Liberalized Remittance Scheme (LRS)?
The GST will be applied on currency conversion and on Remittance Service Charge. GST will not be applied on the tax collection.

Q. What are the scenarios under which the TCS will not apply?
TCS will not be applied in case the remitter is liable to pay tax at source under any other provision and the amount has been deducted. GST will not be applied if the remitter is government or any another person notified by the government. The provision is not applicable if the remitter is a tour operator who is liable to collect the tax and has actually collected.